Value-based exemption notifications must be clubbed for aggregate turnover; exemption stops once the threshold is exceeded.
Where multiple exemption notifications operate on a value-of-clearances basis, the clearances covered by them must be clubbed for computing the aggregate turnover. An explanation in the notifications required clearances exempted under another value-based notification to be included in the aggregate value, so exemption could not continue once the prescribed threshold was crossed. On the stated facts, the combined clearances exceeded the limit, and the exemption was unavailable for the relevant years. The matter was remanded only for re-quantification of duty demand on the basis of the aggregate-value computation.
Issues: Whether the clearances covered by two exemption notifications operating on the basis of value of clearances were required to be clubbed for computing the aggregate turnover and, if so, whether exemption was unavailable once the threshold limit was exceeded.
Analysis: The notifications in question contained Explanation II, under which clearances exempted by another notification based on the value of clearances in a financial year were not to be excluded from the aggregate value computation. Since both notifications granted exemption on the basis of clearances and not on any independent non-value criterion, the clearances under both notifications had to be taken together for the purpose of the aggregate limit. On the facts, the combined value for the relevant financial years exceeded the prescribed limit of Rs. 15 lakhs.
Conclusion: The clearances under both notifications were liable to be aggregated, and exemption beyond the threshold limit was not available for the relevant years. The issue is decided against the assessee and in favour of Revenue.
Final Conclusion: The matter was remanded only for re-quantification of duty demand in light of the aggregate-value computation, while the substantive denial of exemption for the relevant years was upheld.
Ratio Decidendi: Where multiple exemption notifications operate on a value-of-clearances basis, the clearances covered by them are to be clubbed for computing the aggregate value, and exemption is unavailable once the statutory threshold is crossed.
TaxTMI 
AI Drafter ✕
TaxTMI 
