Aggregate value under excise exemption excludes clearances made before goods became specified, regardless of later Modvat availability.

For Notification No. 1/93, clearances of textured yarn made before 25-4-1994 could not be included in the aggregate value of clearances because the notification applied only after textured yarn became a specified good. The relevant computation starts from the first clearance of goods already covered by the notification, so earlier clearances of non-specified goods fall outside the aggregate. The later unavailability of Modvat credit until 20-5-1994 did not change that position or justify counting the pre-25-4-1994 clearances. The stated effect was exclusion of those earlier clearances from aggregation and fresh duty determination on that basis.

---

---

Issues: (i) whether, for the purpose of Notification No. 1/93, clearances of textured yarn made before it became a specified good on 25-4-1994 were to be included in computing the aggregate value of clearances; and (ii) whether the absence of Modvat eligibility until 20-5-1994 prevented the assessee from claiming the notification benefit for the earlier period.

Issue (i): whether, for the purpose of Notification No. 1/93, clearances of textured yarn made before it became a specified good on 25-4-1994 were to be included in computing the aggregate value of clearances

Analysis: The notification operated prospectively from the date textured yarn was brought within its table. The relevant expression was the first clearance of the specified goods, so the commodity had to be a specified good before its clearances could enter the computation. Clearances made when textured yarn was not yet specified could not be treated as clearances of specified goods for aggregation under the notification.

Conclusion: Clearances prior to 25-4-1994 were not includable in the aggregate value computation.

Issue (ii): whether the absence of Modvat eligibility until 20-5-1994 prevented the assessee from claiming the notification benefit for the earlier period

Analysis: The unavailability of Modvat credit for part of the relevant period did not alter the basic scheme of the notification. The assessee could still avail the exemption route applicable to the first clearances of the specified goods. The inability to invoke one concessional option did not postpone the date from which the goods became capable of being counted under the notification.

Conclusion: The absence of Modvat credit till 20-5-1994 did not justify including pre-25-4-1994 clearances.

Final Conclusion: The legal position adopted excluded pre-25-4-1994 clearances from aggregation, and the matter was sent back for fresh determination of duty on that basis.

Ratio Decidendi: For a concessional excise notification, only clearances of goods that had already become specified goods under the notification can be counted in the aggregate value of clearances; prior clearances of non-specified goods are outside the computation, irrespective of later availability of a Modvat-linked option.

---