Clubbing of clearances for small scale exemption fails absent proof that the other unit was a dummy concern.

For small scale exemption, clearances of a separate concern cannot be clubbed with those of the assessee unless the job worker or unit is shown to be a dummy unit or merely an agent of the raw material supplier. A common partner between the two concerns, by itself, does not establish that the assessee manufactured the goods cleared by the other unit. In the absence of material showing that M/s. N.G. Industries was a dummy unit, its clearances could not be added to the appellants' aggregate clearances, and clubbing was not justified.

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Issues: Whether the value of clearances made by M/s. N.G. Industries could be clubbed with the value of clearances of the appellants for the purpose of small scale exemption.

Analysis: The governing principle applied was that the supplier of raw material is not the manufacturer unless the job worker is shown to be a dummy unit or an agent of the raw material supplier. The mere fact that a partner was common to both concerns did not, by itself, establish that the appellants manufactured the goods cleared by M/s. N.G. Industries. In the absence of material showing that M/s. N.G. Industries was a dummy unit, the clearances made by that unit could not be added to the appellants' clearances.

Conclusion: The clubbing of clearances was not justified and the value of clearances of M/s. N.G. Industries was not includible in the appellants' aggregate clearances.

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