2018 (1) TMI 249 - AT - Central Excise

Whether the appellant have exceeded the exemption limit of ₹ 15 lakhs in every financial year i.e. from 1995-96 to 1998-99 and whether they are eligible for exemption N/N. 75/87-CE dt.1.3.1987 on the clearances of heat exchangers which is a part of refrigeration and air conditioner machine? Held that - From the reading of Explanation II in both the notifications it can be seen that in case of exemption based on value of such clearances shall taken together for the purpose of aggregate value therefore in case of both the notification the value of both the clearances will be added - in the year 1996-97 and 1997-98 the aggregate value has exceeded threshold limit of ₹ 15 lakhs. Therefore in these two years exemption N/N. 75/87-CE will not be available over and above threshold limit of ₹ 15 lakhs - the duty needs to be re-quantified. Matter remanded to the adjudicating authority only for re-quantification of demand.

Summary

Issues:
Whether the appellant exceeded the exemption limit of ?15 lakhs in each financial year from 1995-96 to 1998-99 and if they are eligible for exemption under Notification No. 75/87-CE for clearances of heat exchangers.

Analysis:
The appellant claimed that the value in each year was within the exemption limit under two different notifications, 75/87 and 1/93, making them eligible for exemption. However, the Revenue argued that the aggregate value of clearances under both notifications exceeded the threshold limit of ?15 lakhs in the years 1996-97 and 1997-98, rendering the appellant ineligible for exemption.

The Tribunal examined the relevant Explanation II of both notifications. It was noted that for computing the aggregate value of clearances under both notifications, the clearances exempted based on the value of such clearances must be taken together. In the years 1996-97 and 1997-98, the aggregate value under both notifications exceeded the threshold limit, disqualifying the appellant from availing exemption under Notification No. 75/87-CE.

Consequently, the Tribunal remanded the matter to the adjudicating authority for re-quantification of demand in line with the discussion above. The appeal was disposed of by way of remand for re-evaluation of the duty in accordance with the findings.

This judgment highlights the importance of correctly calculating the aggregate value of clearances under multiple notifications to determine eligibility for exemption. It emphasizes the need for strict adherence to the prescribed threshold limits to avail of exemptions under different notifications effectively.