Small scale exemption under Notification 175/86-CE allowed splitting a single clearance between exempt and dutiable portions.

Notification No. 175/86-CE permitted a single clearance to be split between exempt and dutiable portions where the assessee had only a balance remaining within the small scale exemption limit. The Tribunal found no restriction in the notification against apportioning the value of a gate pass or clearance in that manner, and accepted the appellate authority's reading as correct. The clearance value could therefore be adjusted partly against the remaining exemption limit and partly subjected to duty, so the bifurcation was held permissible and the Revenue's challenge failed.

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Issues: Whether, for the purpose of availing small scale exemption under Notification No. 175/86-CE dated 1-3-1986, the value of a single clearance could be split between exempted clearances and dutiable clearances when the assessee had only a partial balance within the exemption limit.

Analysis: The clearance in question occurred when the assessee's aggregate clearances had nearly reached the exemption threshold. The Tribunal found no restriction in Notification No. 175/86-CE preventing the value of a gate pass or clearance from being apportioned in the manner adopted by the assessee, where part of the value was adjusted against the remaining exemption limit and the balance was subjected to duty. The appellate authority's interpretation was accepted as a correct reading of the notification, and no infirmity was found in that view.

Conclusion: The bifurcation of the clearance value for exemption and duty was permissible, and the Revenue's challenge failed.

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