Exemption ceiling under excise notification excludes separate factory-based clearance exemption from aggregate value calculations.

Notification No. 46/81-C.E. was treated as a separate exemption operating on the condition that the goods were manufactured in premises not answering the definition of a factory, and not on the basis of value or quantity of clearances in a financial year. On that footing, clearances of tooth powder exempted under that notification were not to be added to the aggregate value of clearances for applying the ceiling under Notification No. 140/83. Explanation II to Notification No. 140/83 was read as excluding only exemptions under notifications issued under Rule 8(1) that depended on turnover-type limits in the preceding financial year. The duty demand was therefore not sustainable.

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Issues: Whether, for applying the ceiling in Notification No. 140/83, the clearances of tooth powder exempted under Notification No. 46/81-C.E. had to be included in the aggregate value of clearances of all excisable goods in the preceding financial year, thereby denying the exemption and sustaining the duty demand.

Analysis: Notification No. 46/81-C.E. granted exemption without linking it to the value or quantity of clearances in any financial year; it operated on a different condition, namely that the goods were manufactured in premises not answering the definition of a factory. Explanation II to Notification No. 140/83 excluded only those clearances exempted by another notification issued under Rule 8(1) that granted exemption based upon the value or quantity of clearances in a financial year. The phrase "for the time being in force" was construed in the context of the preceding financial year to mean a notification in force during that year, not a notification in force at the time of interpretation.

Conclusion: The clearances of tooth powder were not liable to be included for the ceiling under Notification No. 140/83, and the appellants remained entitled to the exemption for the relevant financial year; the duty demand was unsustainable.

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