V.P. Gulati, Member (T)

1. These appeals are against the orders of Collector of Central Excise (Appeals) Madras who by the impugned orders upheld the rejection of the appellants' claim by the original adjudicating authority. The brief facts are that the appellants are a Small Scale Unit eligible for the benefit of Notification No. 175/86. They are manufacturing plywood, veneers and flush doors falling under sub-heading 4408, 4404 and 4410 respectively. The appellants availed of the benefit of exemption upto Rs. 15/- lakhs limit in respect of their product plywood and blockboards. They have also started clearing their product on payment of duty. However, later they cleared the other two specified items and they were asked to pay duty in respect of the same which they did under protest. The duty demand was made for the reason that although the appellants did not exceed the 15 lakhs limit available for exemption for the other two items, inasmuch as they had cleared plywood and blockboards...value of both duty paid and non-duty paid to nearly Rs. 30.00 lakhs, the benefit of exemption was not available. The order of the original authority in this regard is as under:

"By reading the notification it can be seen that the exemption granted by Clause (a) of the notification is in the case of first clearance of the specified goods upto and of aggregate value not exceeding Rs. 30.00 lakhs. Therefore full exemption of duty granted under clause a (ii) is only in respect of first clearance effected after 1-4-1987 till the aggregate value reach Rs. 30.00 lakhs. Inasmuch as the notification clearly indicates that the exemption is only for the first clearance upto the value of Rs. 30 lakhs there is no scope to grant it when the aggregate value exceed Rs. 30.00 lakhs in respect of the specified goods. The proviso to Clause (a) of the notification clearly restrict that the clearance as per Clause (ii) (at full exemption of duty) should not exceed Rs. 15 lakhs in respect of any one heading. On account of this condition the assessee had paid duty on plywood when the clearance value exceeded Rs. 15.00 lakhs. In view of the above proviso the asses-see has to either stop clearance of the plywood of Chapter 44.08 to enable him to avail the full exemption of Rs. 15 lakhs in respect of remaining Chapter heading or to pay duty and to lose so much benefit. The plywood which has been cleared on payment of duty does not go out of the term "Specified goods" to qualify exclusion while computing the aggregate value of clearance of first 30 lakhs."

The Collector of Central Excise (Appeals) while rejecting the refund claim has held as under:

"Therefore, for duty paid goods also, the same will be computed in the aggregate value. If the appellants want to avail of the exemption in full i.e. total rupees 30 lakhs, and 15 lakhs for each heading of the Central Excise Tariff Act, they should plan their clearances accordingly. Their contention that for one heading they are entitled to 15 lakhs value of clearance without payment of duty, in disregard of the condition of first clearance in a financial year, is not acceptable.

2. Shri Rajeswara Sastry, the learned Consultant has pleaded that the appellants are a registered SSI Unit and fulfil the eligibility criteria for the Notification 175/86. He pleaded that the appellants had been given full benefit of Notification 175/86 in respect of plywood and blockboards.

3. Heard Shri K.K. Bhatia, the learned S.D.R.

4. The point that arises for consideration in the appeal is whether in terms of Notification 175/86 the benefit of the notification is available upto 15 lakhs in respect of each specified item subject to the aggregate value of 30 lakhs and whether on this basis the appellants' claim can be considered as not maintainable. It is seen that the lower authorities have interpreted the notification in a manner that a person who plans his clearance and ensures that he first makes the clearance of each of the two specified goo