Home-consumption exemption remains available despite duty-paid exports to Nepal being counted only for limit computation.

An exemption notification for goods cleared for home consumption was construed so that the deeming treatment of exports to Nepal or Bhutan operated only for limit computation and valuation, not as a full conversion of such exports into home-consumption clearances. On that basis, payment of duty on exports to Nepal did not amount to an election to forgo the benefit of Notification No. 1/93-C.E. for later domestic clearances. The assessee therefore retained the exemption for subsequent clearances for home consumption.

---

---

Issues: Whether payment of duty at full rate on goods exported to Nepal disentitled the assessee to the benefit of Notification No. 1/93-C.E. for subsequent clearances for home consumption.

Analysis: The relevant exemption notification applied to specified goods cleared for home consumption. The provision equating exports to Nepal or Bhutan with home-consumption clearances was held to operate only for computation of the exemption limit and not to confer on such export clearances the status of home-consumption clearances for all purposes. On that construction, payment of duty on export clearances to Nepal did not amount to an election to forgo the exemption under the notification in respect of later clearances for home consumption.

Conclusion: Payment of duty on exports to Nepal did not deprive the assessee of the benefit of Notification No. 1/93-C.E. for subsequent clearances; the issue was decided in favour of the assessee.

Ratio Decidendi: Where an exemption notification applies to clearances for home consumption, an inclusive deeming clause that counts exports to Nepal or Bhutan only for valuation or limit-computation does not convert such exports into home-consumption clearances for the purpose of denying the exemption on subsequent domestic clearances.

---