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TMI Blog2003 (3) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... rationale behind this Explanation; firstly, when the value of the finished goods, which are exempted under different notifications, is to be excluded, having regard to the wording of Explanation II, on the same analogy, the value of inputs which are being used for manufacture of finished goods are also excluded as both are specified goods, subject, of course, to the limit of the notification. Secondly, the notification provides relief to small scale industries; when the inputs which enjoys the exemption under the notification have already been dealt with, there is no reason why the value of the same inputs again be added for the purposes of aggregate value. It follows that the assessee would be entitled to the benefit of Explanation III whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed the demand of duty of Rs. 1.88 lakhs. On appeal by the assessee, the Tribunal allowed the appeal, by majority, by the order impugned in these appeals. 3.Mr. Anoop G. Chaudhary, learned senior counsel appearing for the Revenue, vehemently contends that Explanation III can be invoked only if the finished goods are cleared under the notification and inasmuch as the finished goods are exempted under a different notification and would be deemed to be cleared under that notification, the assessee cannot get the benefit of Explanation III to the notification. 4.If Mr. V. Lakshmikumaran, learned counsel appearing for the assessee, on the other hand, with equal vehemence, submits that when there is a general exemption for clearance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... home consumption on or after the 1st day of April in any financial year, by a manufacturer from one or more factories, — xxx xxx xxx Explanation II - For the purposes of computing the aggregate value of clearances under this notification, the clearances of any excisable goods which are chargeable to nil rates of duty or, which are exempted from the whole of the duty of Excise leviable thereon by any other notification (not being a notification where exemption from the whole of the duty of Excise leviable thereon is granted based upon the value or quantity of clearances made in a financial year) issued under sub-rule (1) of Rule 8 of the said Rules, 1944, or sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken into consideration. In this case, as the finished goods are, admittedly, exempted under Notification Nos. 155/1986, 160/1986 and 124/1988, the value of the exempted finished goods will have to be excluded in arriving at the aggregate value for the purposes of the notification. 8.Now, coming to Explanation III, it provides that where inputs which are specified goods, are used within the factory of production for further manufacture of finished goods which are also specified goods, the clearance of such inputs for such use shall not be taken into account for the purposes of calculating the aggregate value of clearances under this notification. There appears to be a rationale behind this Explanation; firstly, when the value of the finis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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