1998 (6) TMI 277 - AT - Central Excise

Tribunal: Dual Ceiling Limits Must Apply for Excise Duty Exemption

The Tribunal, following a Larger Bench decision, held that both ceiling limits of Rs. 15 lakhs and Rs. 30 lakhs must be followed to avail exemption under ... Value of clearances - Computation of Issues:1. Interpretation of Notification No. 175/86 regarding excise duty exemption.2. Application of the ceiling limits on the aggregate value of clearances under the notification.3. Comparison with precedent judgments and their impact on the current case.Issue 1: Interpretation of Notification No. 175/86The appellant, a manufacturer of excisable goods, availed exemption under Notification No. 175/86 for specific goods. The dispute arose when the total value of clearances exceeded Rs. 30 lakhs, and duty was demanded on the excess. The appellant argued that their exemption was valid as the clearances within the individual ceiling of Rs. 15 lakhs were permitted under the notification, citing precedents supporting their claim.Issue 2: Application of Ceiling LimitsThe respondent, relying on a Larger Bench decision in another case, contended that the appellant's case fell under the scope of the decision, which clarified the interpretation of the notification regarding first clearances and aggregate values. The Tribunal examined the provisions of the notification and the judgment of the High Court, emphasizing the significance of the term 'first clearances' and the intention behind the exemption limits set by the government.Issue 3: Comparison with Precedent JudgmentsThe Tribunal, following the Larger Bench decision, concluded that both ceiling limits of Rs. 15 lakhs and Rs. 30 lakhs had to be adhered to for availing the exemption. Referring to a Supreme Court case with similar dual ceilings, the Tribunal held that the appellant was liable to pay duty on goods beyond the lower ceiling of Rs. 15 lakhs, even if the value of other specified goods' clearances was below Rs. 15 lakhs. The Tribunal dismissed the appeal, stating that duty had to be paid on goods exceeding the lower ceiling, as they were part of the first clearances up to Rs. 30 lakhs.In summary, the judgment clarified the interpretation of Notification No. 175/86, emphasizing the importance of adhering to both ceiling limits for availing exemptions on excisable goods. The decision relied on legal precedents and highlighted the significance of the term 'first clearances' in determining the applicability of duty exemptions based on aggregate values of clearances.