Goods-specific exemption limits must count only clearances of specified goods, excluding pre-amendment non-specified clearances.

For a goods-specific exemption notification, only clearances of goods already specified under the notification can be counted towards the aggregate value limit. Clearances made before cotton yarn became a specified good under Notification No. 1/93-C.E., as amended, could not be treated as first clearances of specified goods for computing the slab benefit. The pre-amendment clearances were therefore excluded from the Rs. 30 lakhs limit, and the exemption applied from the date the goods entered the notification regime. The demand and penalty did not survive, and the assessee's entitlement to the notification benefit was upheld.

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Issues: Whether, for computing the aggregate value limit of Rs. 30 lakhs under Notification No. 1/93-C.E., clearances effected before the relevant goods became specified goods by amendment could be included.

Analysis: The exemption under Notification No. 1/93-C.E., as amended by Notification No. 90/94-C.E., applies to first clearances of specified goods during the financial year. Clearances made before cotton yarn became specified goods could not logically or legally be treated as first clearances of specified goods for the purpose of the exemption limit. The reasoning followed the earlier view that the object of the notification is to grant the prescribed slab benefit on specified goods and not to defeat that benefit by counting non-qualifying clearances made before the item entered the notification regime.

Conclusion: The pre-amendment clearances were not includible in the Rs. 30 lakhs computation, and the assessee was entitled to the exemption from the date the goods became specified goods. The issue is decided in favour of the assessee.

Final Conclusion: The demand and penalty sustained by the lower authority did not survive, and the assessee's entitlement to the notification benefit was upheld.

Ratio Decidendi: For a goods-specific exemption notification, only clearances of goods that are already specified under the notification can be counted towards the aggregate exemption limit; prior clearances of non-specified goods cannot be included.

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