Exemption from excise duty does not remove goods from the tariff schedule, so clearance value must still count toward turnover limits.

Aluminium utensils continued to be excisable goods under Item 68 of the First Schedule despite exemption from duty under Rule 8 of the Central Excise Rules, 1944, because an exemption from payment of duty does not remove goods from the tariff schedule. Their value therefore had to be included in computing clearances for the turnover limit under the exemption notification. The contrary observation relied on by the assessee was treated as obiter and not accepted as stating the law.

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Issues: Whether aluminium utensils exempted from excise duty ceased to be excisable goods so as to be excluded while computing the value of clearances for the turnover limit under the exemption notification.

Analysis: The exemption under Rule 8 of the Central Excise Rules, 1944 operates only as an exemption from payment of duty on goods that remain within the First Schedule to the Central Excises and Salt Act, 1944. Goods do not cease to be excisable merely because a notification grants full or partial exemption. Since aluminium utensils continued to fall under Item No. 68 of the First Schedule, their value had to be included in the computation of clearances. The earlier observation relied upon by the petitioner was treated as obiter and not accepted as laying down that exemption removes goods from the schedule.

Conclusion: Aluminium utensils remained excisable goods and their value was rightly included for deciding the petitioner's eligibility under the exemption notification.

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