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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether, for the purpose of Notification No. 175/86-C.E., clearances of a product on payment of duty after crossing the individual exemption limit of Rs. 15 lakhs are to be ignored while computing the aggregate ceiling of Rs. 30 lakhs and the overall ceiling of Rs. 75 lakhs for first clearances.
Analysis: The notification grants exemption only to the first clearances of specified goods made on or after 1 April in a financial year, and the structure of clauses (a) and (b) shows that the Rs. 15 lakh concession is embedded within the Rs. 30 lakh ceiling for first clearances, with the Rs. 75 lakh cap governing the total of the first and succeeding clearances. The expression "first clearances" is linked to clearances in chronological order, and once goods are cleared in that order, their value cannot be excluded merely because duty was paid on some clearances after the product-wise concession limit was exhausted. The view supported by the Madhya Pradesh High Court was accepted, and the contrary view taken in some earlier Tribunal decisions was not followed.
Conclusion: Clearances made on payment of duty after the product-wise exemption limit is exhausted must be counted in computing the aggregate limits under the notification. The appeals challenging that interpretation failed, while the appeals where the lower authority had excluded such clearances succeeded.
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