Aggregate clearance value exclusion applies where goods are wholly exempt under another notification and cleared under Chapter X procedure.

Clearances of excisable goods fully exempted under another notification are excluded from the aggregate value of clearances for exemption under Notification No. 77/83 and Notification No. 77/85. Explanation II to both notifications directed that such wholly exempt clearances, other than value-based or quantity-based exemptions, should not be counted in computing the financial-year limit. Goods cleared to O.E. manufacturers under Notification No. 167/79 were wholly exempt, so their value was not includible in the computation; once excluded, the assessee remained within the exemption threshold.

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Issues: Whether the value of clearances of excisable goods exempted from the whole of duty under another notification and cleared under Chapter X procedure is required to be included while computing the aggregate value of clearances for exemption under Notification No. 77/83 or Notification No. 77/85.

Analysis: Explanation II to Notification No. 77/83 and Notification No. 77/85 provided that, for computing the value of clearances in a financial year, clearances of excisable goods exempted from the whole of duty under another notification, other than value-based or quantity-based exemption, are not to be taken into account. The goods cleared to O.E. manufacturers were wholly exempted under Notification No. 167/79, and therefore the value of such clearances was required to be excluded from the computation for the later exemption notifications. Once excluded, the total clearance remained within the exemption limit.

Conclusion: The value of clearances made under Chapter X procedure was not includible in the aggregate clearances for Notification No. 77/83 or Notification No. 77/85, and the appeal succeeded.

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