Duty exemption under Notification No. 175/86-C.E. applies to first clearances within the aggregate limit, with separate per-item limits.

Notification No. 175/86-C.E. was read to allow full duty exemption on first clearances during a financial year up to the aggregate ceiling of Rs. 30 lakhs, while each tariff item remained subject to a separate limit of Rs. 15 lakhs within that overall cap. The Tribunal followed Supreme Court authority and its own later precedent, and rejected the Revenue's reliance on a contrary Larger Bench view. The exemption was therefore available to the assessee on the stated basis.

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Issues: Whether, under Notification No. 175/86-C.E., the benefit of full duty exemption for first clearances up to Rs. 30 lakhs was confined to the first clearances in chronological order across all specified goods, or whether each tariff item could separately avail the exemption up to Rs. 15 lakhs within that overall limit.

Analysis: The Tribunal followed the Supreme Court's view in Khalsa Pulp & Paper Industries and the Tribunal's subsequent decision in Loomba Laminates, holding that the notification permits full exemption up to Rs. 30 lakhs for first clearances during a financial year, provided the clearances of each tariff item do not exceed Rs. 15 lakhs. The Larger Bench view relied on by the Revenue was treated as not governing in light of the Supreme Court precedent.

Conclusion: The exemption under Notification No. 175/86-C.E. was available as claimed by the assessee, and the Revenue's interpretation was rejected.

Ratio Decidendi: For Notification No. 175/86-C.E., the ceiling on first clearances is to be read with the per-item limit so that full exemption remains available up to the prescribed aggregate limit during the financial year.

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