Exemption under Notification No. 175/86 upheld where clause (b) applied despite no SSI registration and higher clearances.

Entitlement to exemption under Notification No. 175/86 depended on clause (b) of para 4 of the first proviso, which was treated as a distinct basis from the SSI registration condition and the preceding year's clearance value limit. The appellate authority found that the claim fell within clause (b), and the later amending Notification No. 55/92 did not affect that claim. As the Revenue did not dispute applicability of clause (b), the absence of small scale industry registration and excess clearance value were held irrelevant to the exemption claimed. The respondent was therefore entitled to the benefit of Notification No. 175/86.

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Issues: Whether the respondent was entitled to exemption under Notification No. 175/86 despite not being registered as a small scale industry and despite clearance value in the preceding financial year exceeding Rs. 7.5 lakhs.

Analysis: The respondent's entitlement turned on para 4 of Notification No. 175/86, which contained two distinct clauses in the first proviso. The appellate authority had found that the respondent's claim was confined to clause (b), and that the subsequent amending Notification No. 55/92 did not affect that claim. The Revenue did not dispute before the lower authority or before the Tribunal that the respondent's case fell within clause (b). In that situation, the grounds relating to absence of SSI registration and excess clearance value were held to be irrelevant to the claimed benefit.

Conclusion: The respondent was held entitled to the exemption under Notification No. 175/86 on the basis of clause (b) of para 4.

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