SSI exemption and clubbing of clearances: a separately registered division was treated as part of the same manufacturer.

SSI exemption depends on the aggregate clearances of all excisable goods manufactured by the same manufacturer in one or more factories during the relevant previous financial year. A separately registered excise unit does not become an independent manufacturer merely because it is organised as a distinct division. The chemical division was part of the same company that also operated another manufacturing division, so its clearances had to be clubbed with the clearances of the other unit for exemption eligibility. The chemical division was therefore not entitled to claim SSI exemption on an independent basis, and the Revenue's position on clubbing of clearances prevailed.

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Issues: Whether the chemical division of the company was to be treated as an independent manufacturer for the purpose of small scale industry exemption, or whether its clearances had to be clubbed with the clearances of the other units of the same company.

Analysis: SSI exemption is available only where the aggregate clearances of all excisable goods manufactured by the same manufacturer in one or more factories during the relevant previous financial year remain within the prescribed threshold. The chemical division was part of the same manufacturer that also ran a textile division, and its existence as a separately registered excise unit did not make it an independent manufacturer for SSI purposes. The clearances of all factories of the company were therefore required to be considered together for determining eligibility.

Conclusion: The chemical division was not entitled to SSI exemption on an independent basis, and its clearances were liable to be clubbed with the clearances of the other factory of the company. The Revenue succeeded on this issue.

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