Exemption notification eligibility continued despite no declaration where prior-year clearances stayed within the prescribed limit.

Exemption under Notification No. 175/86 continued for the current financial year where the manufacturer had availed the benefit in the preceding year and the prior-year clearances remained within the prescribed limit. The absence of a formal declaration did not by itself defeat eligibility when the factual position on clearance limits was undisputed. On the admitted facts, the assessee satisfied the notification's condition for continued exemption, so denial of the benefit was unsustainable.

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Issues: Whether the assessee was entitled to exemption under Notification No. 175/86 for the current financial year despite not filing a declaration, where the preceding year's clearances did not exceed the prescribed limit.

Analysis: The applicable notification permitted exemption when the manufacturer had been availing of the benefit in the preceding financial year, and the relevant test was whether the clearances in that year remained within the exemption limit. The absence of a formal declaration did not by itself defeat entitlement where the factual position of eligible clearances was not disputed. On the admitted facts, the preceding year's clearances were within the limit, so the assessee satisfied the condition for continued exemption in the current year under paragraph 4(b).

Conclusion: The assessee was entitled to the benefit of Notification No. 175/86 for the current financial year, and the denial of exemption was unsustainable.

Ratio Decidendi: For exemption notifications of this kind, actual eligibility based on undisputed clearance limits prevails over the mere absence of a declaration, and prior-year eligibility carries forward the benefit where the notification so provides.

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