Integrated exemption scheme under Notification No. 175/86 preserved exemption for other goods despite one item crossing its own limit.

Notification No. 175/86-Central Excise was construed as an integrated exemption scheme for multiple specified excisable goods. The benefit applied to first clearances up to the overall aggregate ceiling, subject to the separate sub-limit for each heading. Crossing the prescribed limit for one item did not, by itself, disentitle the remaining specified goods from exemption so long as the aggregate ceiling was not exhausted. On that construction, denial of exemption to the assessee on the stated ground was incorrect, and the goods in question continued to qualify for the notification benefit.

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Issues: Whether a manufacturer manufacturing more than one specified excisable product loses the benefit of Notification No. 175/86-Central Excise dated 01.03.1986 for other goods merely because the clearance value of one item exceeds the prescribed limit.

Analysis: The notification was construed as an integrated scheme granting full exemption on first clearances up to the overall ceiling for multiple headings, subject to the condition that the clearances under any one heading do not exceed the prescribed sub-limit. The earlier decision relied upon held that once one item crosses its own limit, the remaining specified goods do not for that reason alone cease to enjoy exemption until the aggregate ceiling is exhausted. The same construction had also been accepted in a later single-member decision.

Conclusion: The assessee remained entitled to the exemption for the goods in question, and denial of the notification benefit on the stated ground was incorrect.

Ratio Decidendi: Under Notification No. 175/86, exemption for first clearances of multiple specified goods is governed by the aggregate ceiling for all such goods, subject to the individual heading limit, and breach of the limit for one item does not by itself disentitle the remaining goods from exemption.

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