Small-scale exemption under Notification No. 175/86 can survive absence of registration where prior exemption was already being availed.

Notification No. 175/86 generally requires registration with the Director of Industries for small-scale exemption, but proviso (b) to Para 4 relaxes that where the manufacturer had already been availing the exemption under the notification or specified earlier notifications in the preceding financial year. On the stated facts, prior availing of SSI exemption in earlier financial years brought the assessee within that relaxation, so the absence of registration did not defeat entitlement to the exemption.

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Issues: Whether the assessee was entitled to the small-scale exemption under Notification No. 175/86 despite not being registered with the Directorate of Industries for the relevant year, and whether prior availing of the exemption in the preceding financial years attracted the relaxation in proviso (b) to Para 4.

Analysis: Notification No. 175/86 ordinarily requires registration with the Director of Industries for availing the exemption. However, proviso (b) to Para 4 removes that requirement where the manufacturer had already been availing the exemption under the notification or specified earlier notifications in the preceding financial year. On the facts, the assessee had been claiming SSI exemption during the earlier financial years, bringing the case within the relaxation contained in proviso (b).

Conclusion: The assessee was entitled to the benefit of Notification No. 175/86, and the absence of registration did not defeat the claim.

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