Bonded removals are not clearances for home consumption, so their value is excluded from exemption turnover under central excise notifications.

Goods removed without payment of duty under bond for further processing and returned to the originating factory are treated as removals under bond, not as clearances for home consumption. Reading Rule 96D with Rules 9 and 49 of the Central Excise Rules, 1944, the majority held that such bonded removals could not be included in the aggregate value of clearances for home consumption for exemption under Notifications No. 80/80-C.E. and 83/83-C.E. The dissenting view was that removal under bond still amounted to a clearance and the value should be included, but the ratio states that the bonded removals fall outside the aggregate home-consumption clearance value.

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Issues: Whether the value of cotton and man-made fabrics removed without payment of duty under Rule 96D of the Central Excise Rules, 1944, after processing and sent back to the originating factory under bond, was to be included in the aggregate value of clearances for home consumption for the purpose of exemption under Notifications No. 80/80-C.E. and 83/83-C.E.

Analysis: The majority held that the scheme of the Central Excise Rules distinguishes clearances for home consumption from removals under bond and from removals for export. Rule 96D, read with Rules 9 and 49, treats removals for further processing or return to the originating factory as removals under bond and not as clearances for home consumption. The expression "for home consumption" in Notification No. 83/83-C.E. was therefore construed in contrast with removal under bond, and the value of such bonded removals could not be brought into the aggregate clearance value for denying the exemption.

Conclusion: The bonded removals under Rule 96D were not clearances for home consumption and were not includible in the aggregate value of clearances for the exemption notifications; the appeal was allowed.

Dissenting Opinion: G.P. Agarwal, Member (J), held that removal under bond was still a clearance, that the notification referred to the aggregate value of all excisable goods cleared, and that the value of the processed fabrics sent back under bond had to be included; on that view, the appeal was rejected.

Ratio Decidendi: Where the governing rules and the exemption notification use "clearances for home consumption" in contradistinction to removals under bond, goods removed without payment of duty for further processing and returned under bond are not part of the aggregate clearances for home consumption.

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