SSI exemption threshold under Notification No. 175/86 excludes duty-paid clearances outside the notification scheme, including branded goods.

For SSI exemption threshold computation under Notification No. 175/86, only clearances made under the notification and enjoying full exemption or concessional duty are to be aggregated. Goods cleared at the normal effective rate because they bore another person's brand name, and therefore fell outside the notification scheme, were not includible in the aggregate value of first clearances. The value of such duty-paid clearances could not be counted toward the threshold limit, so the assessee was entitled to relief.

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Issues: Whether, for computing the exemption threshold under Notification No. 175/86, the value of clearances of excisable goods cleared at the normal effective rate without availing the notification, because they bore the brand name of another person, was to be included in the aggregate value of first clearances.

Analysis: The notification scheme confined the computation of the first clearances limit to goods cleared in terms of paragraphs 1(a) and 1(b), namely goods enjoying full exemption or concessional duty. Goods manufactured by a small scale unit and affixed with the brand name of another person, where such goods were chargeable at the normal rate of duty under paragraph 7 and not entitled to the exemption, were outside the category of clearances meant for aggregation under the notification. Their value therefore could not be taken into account for computing the threshold limits.

Conclusion: The value of clearances on which full duty was paid and for which exemption under Notification No. 175/86 was not claimed was not includible in the aggregate value for the threshold limit, and the assessee was entitled to relief.

Ratio Decidendi: For the purpose of SSI exemption threshold computation under Notification No. 175/86, only clearances made under the notification and enjoying its exemption or concessional rate are to be aggregated; clearances liable to normal duty and excluded from the notification scheme are not to be counted.

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