Export clearances for SSI exemption include goods sold for export packing when supported by Form-H and allied export documents.

Cartons cleared by a small scale industry to customers for packing goods ultimately exported were treated as export clearances under Rule 19(1) when supported by Form-H certificates and allied export documents. The Tribunal held that export need not occur directly from the manufacturer's factory, and that export from the customer's premises does not negate the evidentiary value of accepted export proof. Accordingly, such clearances could not be treated as home-consumption clearances for SSI exemption and were excluded from aggregate turnover.

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Issues: Whether cartons cleared by a small scale industry to customers for use in packing goods ultimately exported could be treated as export clearances under Rule 19(1) and excluded from the aggregate value of home clearances for the purpose of SSI exemption.

Analysis: The demand was founded on the premise that Rule 19(1) applied only when goods were exported directly from the factory of production, and that the export documents produced by the assessee were insufficient proof of export. The Tribunal found the case covered by its earlier decision holding that Form-H certificates, along with supporting export documents, are acceptable proof of export for goods sold to merchant-exporters or customers who use the goods in packing exported products. It was held that the manner in which the customer effected export from its own premises did not destroy the character of the documents as proof of export. On that basis, the clearances could not be treated as home-consumption clearances for SSI purposes.

Conclusion: The cartons were held to have been cleared for export under Rule 19(1), not for home consumption, and therefore were not includible in the aggregate value of clearances for SSI exemption. The demand of duty, interest and penalty could not survive.

Ratio Decidendi: Goods cleared to a customer for use in export packing are to be treated as export clearances when supported by accepted export proof such as Form-H and allied documents, and such clearances cannot be added to home-consumption turnover merely because export was effected from the customer's premises.

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