Unit-wise SSI exemption option can be exercised separately for different factories under the notification framework

A small scale exemption notification, as amended, was interpreted to allow a manufacturer with more than one factory to exercise the exemption option unit-wise. The aggregate-clearance conditions remained relevant to overall eligibility, but they did not require uniform treatment of every unit for the purpose of opting out of exemption and paying duty at the applicable rate for a financial year. In the absence of express wording requiring identical election across all factories, one unit could claim the exemption while another unit of the same manufacturer did not. This reading aligned with earlier Tribunal decisions on the notification.

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Issues: Whether, under Notification No. 1/93-C.E. as amended by Notification No. 59/94-C.E., a manufacturer having more than one factory could opt to avail the small scale exemption in respect of one unit while not availing it for another unit of the same manufacturer.

Analysis: The notification granted exemption on clearances of specified goods subject to value limits and other conditions, and the amendment permitted a manufacturer to opt out of the exemption and pay duty at the applicable rate for a financial year. The decisive distinction lay between provisions governing eligibility based on aggregate clearances from one or more factories, and the provision dealing with the manufacturer's option to forgo exemption. The aggregate-clearance clauses were relevant for determining overall eligibility, but they did not compel uniform treatment of all units for the purpose of exercising the exemption option. The absence of language requiring a manufacturer with multiple units to exercise the option identically for every unit indicated that the choice could be made unit-wise. This interpretation was consistent with earlier Tribunal decisions holding that exemption under the notification could be availed for one unit without being availed for another.

Conclusion: The manufacturer was entitled to avail the exemption for one unit while not availing it for another unit, and the demand based on the contrary view was unsustainable.

Ratio Decidendi: In the absence of an express prohibition, an SSI exemption notification permitting a manufacturer to opt out of exemption does not require the option to be exercised uniformly across all units owned by that manufacturer.

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