Per Shri V.P. Gulati :

The issue in the appeal relates to the method of computation of the first clearances for the purpose of benefit of Notification 1/93. The respondents opted for the benefit of Notification 1/93 on 23.5.94, after the appellants item viz., cotton yarn came to be specified as one of the items under the said notification on 25.4.94. The learned lower appellate authority has ordered the reckoning of the clearances as effected by them from 23.5.94 for the purpose of computation of the first clearances for the benefit of the exemption notification. The revenue seeks this computation of the first clearances from 25.4.94 i.e. from the date from which the item came to be notified.

2. The learned Consultant for the respondents has pleaded that the issue stands covered by the ratio of this Tribunal in the case of Watts Electronics Pvt. Ltd. Vs. CCE, Kochi reported in 1994 (70) ELT 127. He has pleaded, under similar circumstances the Tribunal has held as under in para 4:

4. We observe that Notification 175/86 is a beneficient piece of legislation to take care of the special needs of the small scale sector and to provide them with the necessary competitive edge in the matter of the goods manufactured by them. The Notification, as would be seen in Paras 1, 2 & 3, lays down the limits within which the benefit is allowed. The first condition is the goods should be specified in the Notification and in case the goods are specified, then for each of the specified goods the benefit of total exemption or in case of units availing of MODVAT credit on payment of duty of 10%, is limited upto the aggregate value of Rs. 30 lakhs for all specified goods and thereafter in terms of para 1 (b) for the clearances beyond that limit for the specified goods not exceeding Rs. 60 lakhs and upto a total value of Rs. 75 lakhs of the clearances under Paras 1 (a) and 1 (b) at a lower rate of duty than normally chargeable is available. However, the clearances under the exempted rates is not available to an unit with a value of all the excisable goods manufactured by one or more factories, if the total value of the clearances exceeds the limit set out in Para 3 of the Notification. It is not in dispute that limits set out in Para 3 have been exceeded by the appellants. The dispute is as to whether after the appellants opted for the benefit of Notification 175/86 they are eligible for the full concessions as set out under Paras 1 (a) and 1 (b) and Para 2 of the said Notification i.e. whether the appellants are eligible for the exemption benefits upto Rs. 75 lakhs of the goods cleared after they started availing of the benefit of Notification 175/86. We observe that there is nothing in the Notification to say that if a manufacturer starts availing of the benefit of the Notification 175/86 during the middle of a financial year he is not eligible for the clearances at the exempted rates upto the limits as specified in paras 1 (a) and 1 (b) and Para 2 (b) the Notification 175/86. There is also nothing in the notification to say that an assessee can avail of the benefit of Notification 175/86 either in the beginning of the financial year or not at all. In fact such interpretation has not been placed by the authorities on the Notification as the appellants have been allowed to avail of the benefit of Notification 175/86 in the middle of the financial year there is no such bar, once the benefit of the Notification is given it has to be given to the extent of the full value of the goods as set out in Paras 1 (a) and 1 (b) and Para 2 of the Notification. In case the appellants have cleared goods after paying full duty under the Tariff without the benefit of Notification 175/86 that cannot be held to be a reason to deny them the benefit of the Notification upto the limits as specified in Paras 1 (a) and 1 (b) and Para 2 of the said Notification. The learned lower authority has placed a lot of stress on the words "first clearances in a financial year". We h