Excisable goods exemption and suppression of facts: exempted clearances counted toward aggregate value, and extended limitation applied.

Goods listed in the First Schedule remained excisable goods even when temporarily exempted under a separate Rule 8(1) notification, so their value had to be included in computing the aggregate clearances for exemption under Notification No. 71/78-C.E. as amended by Notification No. 141/79-C.E.; on that basis, Tariff Item 68 clearances were counted and the exemption claim for 1979-80 failed. The Tribunal also treated the omission of Tariff Item 68 figures from the statutory classification list as suppression of facts, because the information was available to the manufacturer but not disclosed in the relevant declaration, and therefore upheld use of the extended limitation period for the duty demand.

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Issues: (i) whether goods exempted under a separate notification continued to be excisable goods for the purpose of computing the aggregate value of clearances under Notification No. 71/78-C.E. as amended by Notification No. 141/79-C.E.; and (ii) whether the demand was barred by limitation.

Issue (i): whether goods exempted under a separate notification continued to be excisable goods for the purpose of computing the aggregate value of clearances under Notification No. 71/78-C.E. as amended by Notification No. 141/79-C.E.

Analysis: The exemption notification applied only where the manufacturer satisfied the stipulated value limits of clearances in the preceding financial year. For manufacturers clearing goods under more than one tariff item, the amended notification required aggregation of the value of all excisable goods cleared in the preceding year. The Tribunal held that goods specified in the First Schedule to the Central Excises and Salt Act remained excisable goods even if they were for the time being exempted under a separate notification under Rule 8(1). Accordingly, the value of Tariff Item 68 goods had to be included in the computation of the previous year's aggregate clearances.

Conclusion: The appellants were not entitled to exemption for the clearances made in 1979-80.

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

Analysis: The Tribunal found that the figures relating to Tariff Item 68 clearances were not furnished in the relevant classification list, although the information was available with the appellants. The separate declaration relied upon by the appellants had been made for a different purpose and did not amount to disclosure in the statutory list. On that basis, the omission was treated as suppression of facts, attracting the extended period of limitation.

Conclusion: The demand beyond six months was held to be within limitation.

Final Conclusion: The exemption claim failed and the limitation objection was rejected, so the demand was sustained, while the question of deduction of duty element from assessable value was left to be examined by the Assistant Collector.

Ratio Decidendi: Goods included in the First Schedule remain excisable goods notwithstanding exemption under a separate notification, and suppression of material clearance figures attracts the extended limitation period for duty demand.

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