Exempt clearances count toward aggregate value, but extended limitation fails absent suppression where facts were disclosed.

Fully exempt goods under the residuary tariff item remained excisable goods for tariff purposes, so their clearances had to be included in computing aggregate value under Notification No. 80/80-C.E.; the exclusion in Explanation V applied only to specified goods exempted under another notification. At the same time, the extended limitation period was unavailable because the product, classification and returns had been disclosed, the department was aware of the clearances, and suppression of facts was not established. The demand was therefore confined to the normal limitation period, while inclusion of the clearances in the exemption computation was upheld.

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Issues: (i) Whether clearances of fully exempt goods falling under the residuary tariff item were to be included in computing the aggregate value of clearances for exemption under Notification No. 80/80-C.E.; (ii) Whether the extended period of limitation could be invoked on the ground of suppression of facts.

Issue (i): Whether clearances of fully exempt goods falling under the residuary tariff item were to be included in computing the aggregate value of clearances for exemption under Notification No. 80/80-C.E.

Analysis: Goods falling under the residuary item remained excisable goods because they were specified in the tariff schedule and were covered by the statutory definition of excisable goods. The exclusion in Explanation V to the notification applied only to clearances of "specified goods" exempted by another notification. Goods under the residuary item were not specified goods within the notification, and their clearances therefore had to be counted for determining the aggregate value.

Conclusion: The clearances of the exempt goods were liable to be included in the aggregate turnover computation, against the assessee on this issue.

Issue (ii): Whether the extended period of limitation could be invoked on the ground of suppression of facts.

Analysis: The relevant facts showed that the product had been disclosed in declarations, classification lists had been filed and approved, and return filings were on record. The department was aware of the manufacture and clearance of the goods. In these circumstances, the assessee was under a bona fide belief that the exempt clearances need not be included, and suppression of facts was not established. Without suppression, the extended limitation period could not be applied.

Conclusion: The extended period of limitation was not available, and the demand beyond six months was time-barred, in favour of the assessee on this issue.

Final Conclusion: The appeal succeeded only to the extent that the demand was confined to the normal limitation period, while the substantive inclusion of the disputed clearances for exemption computation was upheld.

Ratio Decidendi: Fully exempt goods remain excisable goods for tariff purposes, but the extended period of limitation cannot be invoked absent suppression where the material facts were disclosed and known to the department.

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