SSI exemption and branded goods must be computed separately, so branded clearances cannot be clubbed to deny the benefit.

Clearances of branded goods and unbranded goods had to be treated separately under Notification No. 8/02 because branded goods were excluded from the small scale exemption computation on a plain reading of paragraphs 3 and 4. The assessee's branded clearances could not be clubbed with unbranded clearances to deny SSI benefit, and the exemption was therefore upheld. The cited Supreme Court ruling was distinguished because it concerned a different factual setting and a different controversy over branded goods.

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Issues: Whether branded goods and unbranded goods could be clubbed for denying small scale exemption under Notification No. 8/02 dated 1-3-2002.

Analysis: The record showed that the respondent manufactured two distinct categories of goods, namely branded goods bearing the mark "ORIENT" and unbranded goods, and the show cause notice itself reflected separate clearances and the relevant value figures. The notification, on a plain reading of paras 3 and 4, excluded branded goods from the SSI computation, and therefore the branded clearances could not be added to the unbranded clearances for denying the benefit. The reliance on the cited Supreme Court decision was distinguished because that case involved a different factual setting concerning branded goods under a different controversy.

Conclusion: The SSI benefit could not be denied by clubbing branded goods with unbranded goods, and the appellate order allowing the exemption was upheld in favour of the assessee.

Final Conclusion: The Revenue's challenge to denial of SSI exemption failed, and the appellate order granting the benefit for unbranded goods was affirmed.

Ratio Decidendi: Where a small scale exemption notification excludes branded goods from the computation of the SSI limit, clearances of branded and unbranded goods must be treated separately and cannot be clubbed to deny the exemption.

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