Small-scale exemption limit computation excludes pre-registration clearances made before eligibility under the notification arises.

Exemption under Notification No. 175/86-C.E. was available only from the date the assessee satisfied the registration condition and came within the notification's scope. Clearances made before that date, when the assessee remained outside the notification, could not be included in computing the exemption limit for the financial year. The counting of clearances commenced only after eligibility to claim the exemption arose. Accordingly, pre-registration clearances from 1-4-1989 to 21-6-1989 were not to be counted towards the exemption threshold, and the Revenue's demand failed.

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Issues: Whether clearances made before the assessee came within the scope of Notification No. 175/86-C.E. and before registration with the Director of Industries were to be counted for computing the exemption limit under the notification.

Analysis: The exemption under the notification became available only from the date on which the assessee satisfied the condition of registration and thus came within the ambit of the notification. Clearances made prior to that date were made while the assessee was outside the notification and could not be brought into the computation of the exemption limit. The counting of clearances for the financial year would arise only after the assessee became eligible to claim the exemption under the notification.

Conclusion: The pre-registration clearances from 1-4-1989 to 21-6-1989 were not liable to be counted towards the exemption limit; the Revenue's demand failed.

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