Clubbing of SSI clearances requires financial flowback and mutual business interest, not just common ownership or shared facilities.

Clubbing of clearances for SSI exemption cannot be based merely on common ownership links, common brand name, office premises or shared facilities. A unit owned by an individual was not to be clubbed with a unit owned by an HUF only because the individual acted as karta, as there was no evidence of financial flowback or mutual interest in each other's business. The denial of exemption was therefore unsustainable, and the impugned order was set aside.

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Issues: Whether the clearances of two units could be clubbed for denying exemption under Notification No. 175/86-C.E. on the ground of common ownership, common brand name and common facilities.

Analysis: Clubbing of clearances requires more than identity of ownership or use of common brand name, office premises or other shared facilities. A unit owned by an individual cannot be clubbed with a unit owned by an HUF merely because the individual is the karta of the HUF. The material required to treat the units as one for exemption purposes is evidence of financial flowback and mutual interest in each other's business, which was absent. The earlier finding that common features alone were insufficient to establish a single proprietary interest was applied.

Conclusion: The clearances of the units could not be clubbed and denial of exemption was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed.

Ratio Decidendi: Clubbing of clearances for SSI exemption cannot rest merely on common ownership links, common brand name or common facilities unless financial flowback and mutual business interest are established.

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