SSI exemption and captive clearances: exempt intermediate goods were excluded from aggregate value for eligibility.

Captive clearances of an intermediate product, where exempt under the general exemption notification, were held not to form part of the aggregate value of clearances for determining eligibility to small scale industries exemption. The CESTAT applied its earlier Bench view in batch appeals and accepted that the value of such captive clearances had to be excluded from the aggregate clearances for the relevant period. On that basis, the assessee was treated as entitled to SSI benefit.

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Issues: Whether the value of captive clearances of an intermediate product, exempt under the general exemption notification, was includible in the aggregate value of clearances of specified goods for determining eligibility to small scale industries exemption.

Analysis: The issue had already been decided by the same Bench in earlier batch appeals, holding that the value of captive clearances of the intermediate product exempt under the general exemption notification was not includible in the aggregate value of clearances for the purpose of SSI exemption. Applying that view, the exclusion of the captive clearance value from the aggregate clearances for the relevant period was held to be correct.

Conclusion: The value of captive clearances was not includible in the aggregate value of clearances of specified goods, and the assessee was entitled to the SSI benefit.

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