Exemption under Notification No. 1/93-C.E. not lost by temporary duty payment on initial clearances

A manufacturer that had notified the department of its intention to claim exemption under Notification No. 1/93-C.E. did not forfeit that benefit by paying duty on initial clearances at the start of the financial year while checking the prior year's turnover limit. The proviso to the notification applied only where an assessee had chosen not to avail the exemption, and temporary duty payment in a cautious, verification-based manner did not amount to an implied waiver or election to abandon the notification. The assessee therefore remained entitled to claim the exemption for the rest of the financial year, subject to the notification's conditions.

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Issues: Whether an assessee that paid duty at the beginning of the financial year under Notification No. 1/93-C.E. could still avail the exemption for the rest of the year if the conditions were otherwise satisfied.

Analysis: The proviso to the notification applied to a manufacturer who had chosen not to avail the exemption. The assessee had not opted out of the notification; instead, it had intimated the department that it was availing the exemption. Temporary payment of duty in the opening days of the financial year, made while verifying the preceding year's clearance limit, did not amount to an implied or de facto waiver of the exemption. Such cautious payment could not be treated as an election to forego the benefit of the notification.

Conclusion: The assessee remained entitled to the exemption under Notification No. 1/93, and payment of duty on some initial clearances did not bar it from availing the benefit later in the same financial year.

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