SSI exemption applies to unendorsed goods under provisional registration, and an objection beyond the show cause notice fails.

SSI exemption under Notification No. 175/86-C.E. was available even where the generating sets were not specifically endorsed in the provisional SSI registration certificate, as Board clarification and prior tribunal decisions recognised such goods as eligible. Denial of exemption on the separate ground that the registration was only provisional was not sustainable because that objection was outside the scope of the show cause notices. Provisional registration under the industrial registration framework was treated as acceptable SSI registration for exemption purposes, and the duty demand was therefore not maintainable.

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Issues: Whether the appellants were entitled to Small Scale Industry exemption under Notification No. 175/86-C.E. in respect of generating sets not specifically endorsed in the provisional SSI registration certificate, and whether the demand could be sustained on the ground that the registration was provisional and required verification.

Analysis: The entitlement to SSI exemption for goods not endorsed in the SSI registration certificate had already been clarified in favour of the assessee by the Board's circular and by prior tribunal decisions. The denial of exemption on the new ground that the registration was only provisional was not sustainable because that ground was outside the scope of the show cause notices. In any event, provisional registration granted to an SSI unit under the industrial registration framework was treated as acceptable SSI registration for the purposes of the exemption notification, and the departmental view was supported by the Board's clarification.

Conclusion: The appellants were entitled to the SSI exemption, and the duty demand was not maintainable.

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