SSI exemption follows manufacturer status, so factory relocation and lack of new-site registration did not defeat the benefit.

SSI exemption under Notification No. 175/86 was treated as attaching to the status of the manufacturer, not to a single factory location. Shifting the factory to new did not by itself extinguish the exemption, and the absence of registration at the new site could not defeat the benefit where the substantive SSI conditions were satisfied. Clearances from the assessee's different premises were to be clubbed for the relevant years, and the record did not show that the ceiling was crossed in a manner warranting denial. The denial of SSI exemption was therefore unsustainable, and the assessee remained entitled to the benefit.

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Issues: Whether the assessee remained entitled to the benefit of SSI exemption under Notification No. 175/86 after shifting the factory to a new premises, and whether denial of the benefit on the ground of absence of registration at the new site was sustainable.

Analysis: The exemption was treated as attaching to the status of the manufacturer and not to a single location in isolation. Clearances from the assessee's different premises were required to be clubbed for the relevant years, and the record showed that the clearances in the material years did not cross the ceiling in the manner required to deny the exemption. Once the assessee had been entitled to SSI status, the mere shifting of the factory premises did not, by itself, take away the benefit. The requirement of registration could not be used to deny the exemption when the substantive conditions for SSI benefit were satisfied.

Conclusion: The denial of SSI exemption under Notification No. 175/86 was unsustainable and the assessee was entitled to the benefit.

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