First slab benefit under excise exemption notification denied where prior clearances had already exhausted the slab limit before opting in.

Notification No. 138/86-C.E. was interpreted to mean that entitlement to the first slab depended on clearances from the point of valid election to the notification, but prior clearances under another concessional notification could still be counted where the slab limit had already been exhausted before the option was exercised. On the facts, the assessee had already removed the goods in excess of the relevant threshold before shifting to Notification No. 138/86-C.E., so the first slab benefit was unavailable from the date of opting. The department's view prevailed.

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Issues: Whether the benefit of the first slab under Notification No. 138/86-C.E. was available from the date on which the assessee opted for the notification, notwithstanding that the assessee had already effected clearances exceeding the slab limit before opting for it.

Analysis: The dispute turned on the meaning of the expression governing the first clearance under the notification. The assessee had continued to clear the same goods under another concessional notification before filing the revised classification list and seeking to shift to Notification No. 138/86-C.E. The department's case was that the quantity already cleared prior to the option had to be counted for the slab limit, so the first slab had been exhausted. The assessee contended that the count should begin only from the date of opting for the notification. The Tribunal accepted that the assessee had already removed paper in excess of 3000 tons by the time it elected to avail the notification.

Conclusion: The first slab under Notification No. 138/86-C.E. was not available from the date of opting when the slab limit had already been crossed by earlier clearances; the department's view prevailed.

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