Amended small scale exemption rules barred Notification 175/86 benefit after prior-year clearances exceeded the limit.

Notification No. 55/92 amended Notification No. 175/86 by substituting the second proviso to paragraph 4 and withdrawing clause (b) relief where a manufacturer had availed exemption under clause (a) in any preceding financial year. Because the respondents had crossed the prescribed clearance limit in the prior year and were not registered as a small scale unit, those facts being uncontested, the amended notification barred them from claiming the exemption for 1-4-1992 to 21-5-1992. The exemption under Notification No. 175/86, as amended, was therefore unavailable, and the matter was decided in favour of the Revenue.

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Issues: Whether the respondents were entitled to the benefit of Notification No. 175/86 for the period 1-4-1992 to 21-5-1992 after its amendment by Notification No. 55/92.

Analysis: Notification No. 55/92 substituted the second proviso to paragraph 4 of Notification No. 175/86 and withdrew the benefit of clause (b) where the manufacturer had availed exemption under clause (a) in any preceding financial year. The respondents had exceeded the specified clearance limit in the preceding year and were not registered as a small scale unit, and those facts were not controverted. On that basis, the amended notification barred the respondents from claiming the exemption during the relevant period.

Conclusion: The respondents were not entitled to the benefit of Notification No. 175/86 as amended, and the issue was decided in favour of the Revenue.

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