Mistaken tariff duty payment does not forfeit Small Scale Exemption where no conscious waiver is shown.

A mistaken initial payment of duty at the tariff rate did not amount to an irrevocable waiver of Small Scale Exemption under Notification No. 1/93-C.E. where eligibility, clearance limits, and absence of a conscious decision to forgo the benefit were not disputed. The later revised classification list corrected the error, and the contemporaneous facts did not show any deliberate attempt to abandon the exemption. On that basis, the exemption remained available and the duty demand founded on denial of the benefit was not sustainable.

---

---

Issues: Whether the appellant was entitled to avail Small Scale Exemption under Notification No. 1/93-C.E. as amended, despite having initially paid duty at the tariff rate and later filing a revised classification list.

Analysis: The appellant's initial payment of duty at the tariff rate was treated as a genuine mistake arising from the belief that branded goods attracted tariff duty. The authorities did not dispute the appellant's eligibility for small scale exemption, the quantum of clearances, or the claim that no conscious option had been exercised to forego the exemption. The relevant events occurred soon after the amendment brought in by Notification No. 59/94-C.E. dated 01-03-1994, and the factual matrix did not indicate any deliberate attempt to evade the benefit of exemption. In these circumstances, the earlier mistaken payment could not bar the appellant from claiming the exemption once the error was rectified.

Conclusion: The appellant was entitled to the benefit of Small Scale Exemption, and the demand based on denial of that benefit was not sustainable.

Ratio Decidendi: A mistaken initial payment of duty at the tariff rate does not, by itself, amount to an irrevocable exercise of option to forego a conditional exemption where eligibility to the exemption is otherwise undisputed and no deliberate waiver is established.

---