Sequential exemption availment under excise notifications was accepted, and the demand was also treated as time-barred.

An exemption scheme under Notification No. 8/2001-C.E. and Notification No. 9/2001-C.E. was read as permitting sequential availment within the same financial year, with the manufacturer first clearing goods at the nil rate up to the threshold and then opting for the concessional notification for further clearances. The text notes that no prohibition in Notification No. 8/2001-C.E. barred such a switch, and that the clearances remained within the prescribed limits. It also records that, because there was no allegation of suppression or misdeclaration, the limitation objection was not overcome and the demand was treated as time-barred.

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Issues: (i) Whether an assessee availing the benefit of Notification No. 8/2001-C.E. could subsequently opt for the benefit of Notification No. 9/2001-C.E. in the same financial year; and (ii) whether the demand was barred by limitation.

Issue (i): Whether an assessee availing the benefit of Notification No. 8/2001-C.E. could subsequently opt for the benefit of Notification No. 9/2001-C.E. in the same financial year.

Analysis: The exemption scheme was read as permitting a manufacturer to clear goods at the nil rate up to the threshold under Notification No. 8/2001-C.E. and thereafter to opt for Notification No. 9/2001-C.E. for further clearances at the concessional rate. The reasoning accepted that there was no prohibition in Notification No. 8/2001-C.E. against shifting to Notification No. 9/2001-C.E., and that the illustrative material in Notification No. 9/2001-C.E. supported such sequential availment. On the facts, the clearances remained within the prescribed limits and the duty already paid at the concessional rate was correctly computed.

Conclusion: The assessee was entitled to avail both notifications sequentially in the same financial year, and the demand on the footing of impermissible twin benefit was unsustainable.

Issue (ii): Whether the demand was barred by limitation.

Analysis: The record showed no allegation of suppression of facts or mis-declaration, and the Revenue did not effectively meet the limitation objection. The demand was therefore not supported on limitation grounds.

Conclusion: The demand was barred by limitation.

Final Conclusion: The Revenue appeal failed, the assessee's exemption claim was upheld, and the duty demand and penalties were set aside.

Ratio Decidendi: Where the exemption notifications permit sequential availment within the statutory thresholds and no legal bar exists in the scheme, the assessee may opt for the subsequent concessional notification in the same financial year; a demand raised contrary to that scheme, and without sustainable limitation grounds, cannot be upheld.

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