Small-scale industry exemption: duty-paid clearances must be counted in aggregate when computing first-clearance value.

For small-scale industry exemption under Notification No. 175/86-C.E., first clearances had to be computed chronologically on the aggregate value of all specified goods cleared under multiple headings. Duty-paid clearances could not be excluded from the exemption computation, because the ceiling applied to the total value of first clearances and not separately to each heading. The Tribunal noted that this interpretation had already been settled by the Supreme Court and held that the exemption could not be extended by leaving out goods cleared on payment of duty under one heading; the Revenue's appeal was rejected.

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Issues: Whether, for the purposes of small-scale industry exemption, clearances of goods on payment of duty under one heading are to be excluded while computing the aggregate value of first clearances of specified goods manufactured under multiple headings.

Analysis: The Tribunal applied the settled interpretation of Notification No. 175/86-C.E. dated 01-03-1986 that the exemption for first clearances operates in chronological order on the aggregate value of clearances and that duty-paid clearances cannot be ignored while reckoning the exemption limit. Since the manufacturer had cleared goods under more than one heading, the value of all specified clearances had to be taken together for determining whether the ceiling had been crossed. The Tribunal also noted that the issue had already been settled by the Supreme Court following the same principle.

Conclusion: The exemption could not be extended by excluding duty-paid clearances under one heading, and the Revenue's appeal was rejected.

Ratio Decidendi: For a notification granting exemption up to a specified value of first clearances, all specified clearances must be counted in chronological order on an aggregate basis, and clearances already subjected to duty cannot be left out of the computation.

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