Nil-rated exempt goods remain excisable and count toward aggregate clearances for small-scale industry exemption limits.

Goods exempted from duty at a nil rate remain excisable goods, so their value may be counted in aggregate clearance calculations under a small-scale industry exemption. Where the notification denies benefit if a manufacturer deals in excisable goods falling under more than one item of the First Schedule and the prescribed turnover limit is exceeded, exempted goods do not drop out of the computation merely because duty is nil. On that footing, the value of the exempted printed cartons was includible with the other clearances, and the small-scale industry exemption was unavailable.

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Issues: Whether goods on which exemption reduced the duty to nil could still be treated as excisable goods for computing the aggregate value of clearances under the exemption notification, and whether the value of such goods could be included to deny small-scale industry benefit.

Analysis: The exemption notification denied its benefit where a manufacturer dealt in excisable goods falling under more than one item of the First Schedule and the aggregate value of clearances exceeded the prescribed limit. Goods attracting nil duty under an exemption notification did not cease to be excisable goods. Accordingly, printed cartons, though exempted from duty, remained liable to be counted along with playing cards for the purpose of applying the turnover ceiling under the notification.

Conclusion: The value of the exempted printed cartons was rightly included in the aggregate clearance value, and the assessee was not entitled to the small-scale industry exemption.

Final Conclusion: The exemption claim failed because goods carrying nil duty continued to be excisable goods for the purpose of the turnover condition in the notification.

Ratio Decidendi: Goods exempted from duty so as to attract a nil rate remain excisable goods and may be included in aggregate clearance calculations where the exemption condition turns on clearances of excisable goods from more than one tariff item.

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