SSI exemption under Notification No. 9/99: captive inputs cannot be added to clearance value, and exemption remains available if the ceiling is not crossed.

For SSI exemption under Notification No. 9/99, the qualifying aggregate clearances for home consumption in the preceding financial year had to remain within the prescribed ceiling, and the appellant had filed the required declaration with no evidence of breach of that limit. Captively consumed inputs could not be added to the clearance value for computing eligibility. On that basis, the exemption was available, and the resulting demand and penalty were unsustainable, with consequential relief following from the exemption.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 9/99 for the financial year 1999-2000, and whether the value of captive inputs could be included while computing the prescribed clearances limit.

Analysis: The appellant had filed the requisite declaration and its clearances in the preceding financial year were below the prescribed ceiling. The condition in the notification required the aggregate value of clearances for home consumption in the preceding financial year not to exceed the limit. There was no evidence that the appellant had crossed that limit. Captively used inputs were not liable to be included in the computation of clearances for the purpose of the exemption.

Conclusion: The appellant was entitled to the benefit of Notification No. 9/99, and the denial of exemption was unsustainable.

Final Conclusion: The demand and penalty could not be sustained, and the appellant obtained the consequential relief flowing from the exemption.

Ratio Decidendi: For an SSI exemption notification, only the qualifying aggregate clearances specified by the notification can be counted, and captive consumption cannot be added to deny the exemption in the absence of proof of violation of the prescribed limit.

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