Exemption notification interpretation: pre-duty clearances counted when the notification fixes base clearances by first clearance of specified goods.

An exemption notification fixing base clearances by reference to the first clearance of specified goods was construed by its plain wording, so goods manufactured and cleared before duty became chargeable still counted where the notification so provided. The Court held that the fact that the goods were not dutiable at the earlier time did not alter the meaning of "clearance" in the notification, because the scheme referred to clearances of specified goods, not only dutiable removals. The statutory levy and excise procedure could not override the express language of the exemption notification, and the appellant was treated as falling within clause (c).

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Issues: Whether the appellant's goods fell under clause (c) of paragraph 2 of Notification No. 198/76-C.E. for determining base clearances, and whether clearances made before the levy of duty could be ignored for that purpose.

Analysis: The Notification fixed the base period according to the first clearance of the specified goods from the factory. The goods had been manufactured and cleared before 1 April 1973, so the case answered the description in clause (c). The fact that the goods were not dutiable before 1 March 1974 did not control the meaning of clearance in the Notification, because the scheme of the Notification spoke to clearances of specified goods and not merely to removal of dutiable goods. The statutory levy under Section 3 of the Central Excise Act and the machinery under Rule 9 of the Central Excise Rules did not displace the clear wording of the exemption notification.

Conclusion: Clause (c) applied and the base clearances were correctly determined on that footing. The contention that pre-duty clearances could not be counted was rejected.

Final Conclusion: The exemption notification was construed according to its plain terms, and the appellant was held to fall within clause (c), leaving the revenue's assessment undisturbed.

Ratio Decidendi: Where an exemption notification fixes eligibility or base clearances by reference to the first clearance of specified goods, clearances made before the levy of duty must be counted if the notification's language so provides, and the plain wording cannot be overridden by the date from which duty became chargeable.

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