Exempted goods remain excisable goods, so their value counts toward clearance limits under central excise exemption notifications.

Goods exempted from duty under an exemption notification remain excisable goods under central excise law. The Tribunal rejected reliance on sales tax authorities construing "taxable goods" under a different statutory scheme and accepted the view that exemption does not change the character of the goods. Applying the scheme of central excise and Rule 8(1), it held that the value of exempted goods must be included in computing aggregate clearances for eligibility under Notification No. 80/80, as amended by Notification No. 73/81. The inclusion of exempted goods in the 1980-81 clearance threshold was therefore correct in law, and the duty demand was sustained.

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Issues: Whether the value of goods exempted under a notification is to be included while computing the aggregate value of clearances for the purpose of Notification No. 80/80, as amended by Notification No. 73/81, and whether such exempted goods cease to be excisable goods.

Analysis: The Tribunal held that the reasoning drawn from sales tax cases dealing with "taxable goods" under a different statutory scheme could not control the meaning of "excisable goods" under the central excise law. It accepted the view expressed by several High Courts that exemption from duty does not alter the character of goods as excisable goods. Relying on the scheme of central excise and the nature of exemption under Rule 8(1) of the Central Excise Rules, the Tribunal concluded that goods exempted from duty remain excisable goods and their value must be taken into account for determining eligibility under the notification.

Conclusion: The inclusion of the value of exempted goods in the aggregate clearances for 1980-81 was held to be correct in law, and the appeal was rejected.

Final Conclusion: The assessee was not entitled to exclusion of exempted goods from the clearance threshold under the relevant exemption notification, and the duty demand was sustained.

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