Exempt goods count toward clearance limits, and erroneous refunds may be recovered within limitation despite prior approval.

Goods cleared without payment of duty remained excisable for computing the aggregate clearances under Notification No. 80/80-C.E., so the turnover ceiling was exceeded and the exemption was unavailable. The Tribunal also held that the show cause notice to recover the refund was within limitation, taking the relevant date as the actual date of refund and finding the notice issued within six months. It further held that the Assistant Collector had jurisdiction to issue the recovery notice, since prior grant or approval of the refund did not bar recovery of an erroneous refund under the statutory scheme.

---

---

Issues: (i) Whether the value of goods cleared without payment of duty was includible in computing the aggregate clearances for availing the benefit of Notification No. 80/80-C.E. dated 19-6-1980 and, consequently, whether the exemption was available. (ii) Whether the show cause notice for recovery of the refund was barred by limitation. (iii) Whether the Assistant Collector had jurisdiction to issue the notice to recover the refund granted earlier.

Issue (i): Whether the value of goods cleared without payment of duty was includible in computing the aggregate clearances for availing the benefit of Notification No. 80/80-C.E. dated 19-6-1980 and, consequently, whether the exemption was available.

Analysis: The Tribunal followed its earlier view that even goods exempted from duty by notification do not cease to be excisable goods. The competing High Court views were noted, but the Tribunal accepted the line of authority supporting Revenue and held that exempted goods remain part of the clearances for the purpose of the notification's turnover ceiling.

Conclusion: The inclusion of such clearances was correct and the claim to exemption failed.

Issue (ii): Whether the show cause notice for recovery of the refund was barred by limitation.

Analysis: The relevant date for limitation was taken to be the date on which the refund was actually made, not the date on which the refund order was passed. On either factual possibility referred to in the record, the notice issued within six months was within time.

Conclusion: The notice was not barred by limitation.

Issue (iii): Whether the Assistant Collector had jurisdiction to issue the notice to recover the refund granted earlier.

Analysis: The Tribunal held that there was no legal bar to reopening the matter and raising a demand notwithstanding the earlier approval or sanction by the same authority. The earlier approval did not create an absolute bar against recovery of an erroneous refund within the statutory framework.

Conclusion: The Assistant Collector had jurisdiction to issue the notice.

Final Conclusion: The assessee was held not entitled to the exemption, and both the limitation and jurisdiction objections were rejected, leaving the demand intact.

Ratio Decidendi: Goods exempted from duty by a notification remain excisable goods for computing clearance limits under the notification, and an erroneous refund may be recovered within the statutory period notwithstanding prior approval by the same authority.

---