1998 (5) TMI 112 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 175/86 regarding exemption limits.
2. Applicability of Explanation II in computing aggregate value of clearances.
3. Consideration of fully exempted goods in calculating aggregate value under Para 3.

Analysis:
1. The case involved a dispute regarding the benefit of Notification No. 175/86 for a manufacturer of capacitors whose clearance exceeded Rs. 1.50 crores during the financial year 1987-88. The appellant claimed the benefit of the notification from 1-4-1988, but the Revenue denied it based on the aggregate value of clearances in the preceding financial year. The Tribunal was called to decide on the merits of the case.

2. The appellant contended that the value of goods fully exempted should not be considered in computing the aggregate value of clearances under Notification No. 175/86, citing Explanation II of the notification. The Revenue argued that Explanation II applied only to Para 1 and not to Para 3, which determines the eligibility for the notification based on aggregate clearances of all excisable goods. The Tribunal carefully analyzed the contentions of both parties.

3. The Tribunal observed that the term "aggregate value" appeared in various parts of the notification, including Para 3, and noted that Explanation II provided the method for computing the aggregate value of clearances. Therefore, the Tribunal concluded that Explanation II should apply wherever the term "aggregate value of clearance" is mentioned. As the appellant's clearances under a previous notification were fully exempted, they should not be included in calculating the aggregate value under Para 3. Consequently, the Tribunal ruled in favor of the appellant, stating that the benefit of Notification No. 175/86 could not be denied, and set aside the impugned order, allowing the appeal with consequential relief to the appellants.