SSI exemption under Notification 175/86 fails when clearance limits are crossed and normal duty payment has begun.

Concessional duty under Notification No. 175/86 was denied because the loan licensee had already crossed the prescribed clearance limit and become ineligible for the small scale industry exemption before the relevant classification list was filed. The applicable concession depended on the unit's continuing eligibility and the correct computation of aggregate clearances. As the unit had begun paying duty at the normal rate after crossing the limit, clearances made on its behalf could not be treated as qualifying for the concessional rate. The demand confirmed by the Assistant Collector was restored.

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Issues: Whether the respondents were entitled to concessional duty under Notification No. 175/86 when the loan licensee had crossed the clearance limit and thereby become ineligible for the exemption.

Analysis: The claim to exemption depended on the eligibility of the unit for the small scale industry concession and on the correct computation of the aggregate value of clearances. The factual position accepted by the Tribunal was that the loan licensee had crossed the prescribed clearance limit before the relevant classification list was filed and had started paying duty at the normal rate. In that situation, the clearances made on behalf of such ineligible unit could not be treated as entitled to the concessional rate under the notification.

Conclusion: The respondents were not entitled to concessional duty under Notification No. 175/86, and the demand confirmed by the Assistant Collector was restored.

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