Small-scale exemption requires independent clearances; clubbing another unit's turnover needs a proper legal and factual basis.

Eligibility for small-scale exemption must be assessed on the assessee's own clearances, and the clearances of another unit cannot be clubbed merely because that unit was managing its affairs. The record did not show a proper factual and legal examination of whether the appellant was disentitled to exemption under Notification No. 85/85, and the conditions of Notification No. 175/86 also required reconsideration. On that basis, the existing clubbing of clearances was not sustained, the impugned order was set aside, and the dispute on exemption eligibility and duty liability was remitted for fresh adjudication after hearing the appellant.

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Issues: Whether the appellant's clearances could be clubbed with those of M/s. J & K Industries for determining eligibility to the exemption under Notification No. 85/85 and the consequent duty liability.

Analysis: The issue of exemption had to be examined on the basis of the appellant's individual clearances. The clearances of another unit could not be mechanically added merely because it was managing the affairs of the appellant. The record did not show a proper examination of whether the appellant was disentitled to the benefit of the exemption notification on the relevant facts, and the applicability of the conditions in Notification No. 175/86 also required reconsideration.

Conclusion: The clubbing of clearances was not sustained on the existing adjudication, and the matter required fresh examination by the adjudicating authority.

Final Conclusion: The impugned order was set aside and the dispute on exemption eligibility and duty liability was sent back for reconsideration after hearing the appellant.

Ratio Decidendi: For eligibility to a small-scale exemption, an assessee's clearances must be assessed on its own footing, and clearances of another unit cannot be clubbed without a proper legal and factual basis.

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