SSI exemption option must be exercised uniformly across all specified goods, not selected item-wise by the manufacturer.

Notification No. 8/99-C.E. was interpreted as giving a manufacturer a unit-wide option either to claim SSI exemption or to forgo it, but not to select exemption item-wise for some specified goods and normal duty for others cleared by the same unit. The construction was supported by the related scheme of Notifications No. 8/99-C.E. and No. 9/99-C.E., which treated the exemption and concessional duty framework as alternative modes of taxation. The stated principle is that, unless the notification expressly allows segregation, the exemption option must be exercised uniformly for all specified goods manufactured and cleared by the assessee.

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Issues: Whether, under Notification No. 8/99-C.E., a manufacturer could avail SSI exemption for some specified goods while opting to pay duty at the normal tariff rate for other specified goods manufactured by the same unit.

Analysis: The notification conferred on a manufacturer an option either to avail the exemption or not to avail it. The condition in paragraph 2 was read as requiring the option to be exercised in respect of the manufacturer as a whole for all specified goods cleared by him, and not as permitting item-wise selection of some goods for exemption and others for normal duty. The scheme of Notifications No. 8/99-C.E. and No. 9/99-C.E. was treated as supporting that construction, since the first notification provided exemption up to the prescribed limit while the second provided concessional duty from the beginning of the year.

Conclusion: The option under Notification No. 8/99-C.E. could not be exercised selectively for some specified goods only, and the exemption had to be applied uniformly to all specified goods manufactured and cleared by the assessee.

Final Conclusion: The Tribunal expressed a substantive view on the scope of the SSI exemption notification but, because it differed from an earlier Tribunal view, it referred the matter to a Larger Bench for consideration.

Ratio Decidendi: Where a notification grants a manufacturer an option to forgo exemption, the option must be exercised consistently for all specified goods covered by that manufacturing unit and cannot be split item-wise unless the notification expressly permits such segregation.

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