Aggregate clearance valuation under small scale exemption excludes duty-paid goods, even where branded goods are also cleared.

Under Notification No. 175/86-CE, the aggregate value of clearances for the small scale exemption scheme was not to include goods cleared on payment of duty, even where the manufacturer also cleared specified branded goods. The notification had to be read as a whole, and the exclusion for branded goods was applied without isolating Explanation II. The Tribunal followed its earlier view that duty-paid clearances were outside the aggregate computation for exemption purposes, so the value of such goods was not clubbed with exempted clearances for the exemption limit. The interpretation favoured the assessee.

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Issues: Whether, for computing the aggregate value of clearances under Notification No. 175/86-CE, the value of branded goods cleared on payment of duty was required to be clubbed with the clearances of the exempted goods.

Analysis: The notification was read as a whole. The exclusion in the notification for specified branded goods was applied, and the Tribunal followed its earlier decisions holding that goods cleared on payment of duty were not to be included for computing the aggregate clearances under the small scale exemption scheme. The reasoning rejected the Revenue's attempt to rely only on Explanation II in isolation.

Conclusion: The value of goods cleared on payment of duty was not liable to be clubbed with the clearances of the specified goods for the purpose of the exemption limit, and the finding was in favour of the assessee.

Ratio Decidendi: An exemption notification governing aggregate clearances must be construed as a whole, and clearances of goods already subjected to duty are not to be included in the aggregate value merely because the manufacturer also clears goods bearing another person's brand name.

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