Separate exemption for each specified product category upheld; duty-paid clearances of one item do not reduce another's entitlement.

Under Notification No. 175/86, the exemption limit of Rs. 15 lakhs was to apply separately to each specified category of goods, subject to the overall aggregate limit of Rs. 30 lakhs. The Tribunal rejected an interpretation that would make exemption depend on the sequence in which different goods were cleared, as that would irrationally discriminate between manufacturers based on production or market planning. So long as the other conditions of the notification were satisfied, duty-paid clearances of one category did not reduce the exemption available for another category. The refund claim was therefore required to be reconsidered on that basis.

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Issues: Whether, under Notification No. 175/86, the exemption limit of Rs. 15 lakhs applied separately to each specified item subject to the overall aggregate limit of Rs. 30 lakhs, so that duty-paid clearances of one item would not reduce the exemption available for another item.

Analysis: The Tribunal held that the notification could not be construed so as to discriminate between manufacturers merely because they arranged clearances of different goods in a different order according to their production or market programme. An interpretation that makes the availability of exemption depend on the sequence of clearances, rather than on satisfaction of the substantive conditions of the notification, was found to be irrational. Subject to the other requirements of the notification being fulfilled, the exemption upto Rs. 15 lakhs was available for each category of specified goods, and duty-paid clearances of one category did not take away that entitlement for another category.

Conclusion: The appellants were entitled to claim the exemption separately for each specified item upto the prescribed limit, and the matter was remitted for de novo consideration of the refund claim in accordance with the notification.

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