Clubbing of clearances and strict small-scale exemption conditions led to denial of complete pre-deposit waiver.

Notification No. 8/2003-C.E. was read as requiring clubbing of clearances where goods are cleared by one or more manufacturers from one or more factories, so small-scale exemption was available only on strict compliance with its conditions. On a prima facie view, the clearances of three units operating from the same premises were liable to be aggregated for eligibility testing, and the challenge to invocation of the extended period also appeared unsustainable because no disclosure of the manufacturing activity to the department was shown. The financial hardship plea was rejected on the basis of the balance-sheets and liquid assets produced, so complete waiver of pre-deposit was declined.

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Issues: Whether complete waiver of pre-deposit was warranted in an appeal challenging denial of small-scale exemption on the basis of clubbing of clearances and invocation of the extended period.

Analysis: Notification No. 8/2003-C.E. was construed as requiring clubbing of clearances where goods are cleared by one or more manufacturers from one or more factories, and the exemption was held to be available only on strict compliance with its conditions. On a prima facie view, the clearances of the three units operating from the same premises were liable to be aggregated for testing eligibility under the notification. The plea against invocation of the extended period was also found prima facie unsustainable, since no disclosure of the manufacturing activity to the department was shown. The financial hardship plea was not accepted on the basis of the balance-sheets and liquid assets produced.

Conclusion: Complete waiver of pre-deposit was declined, and the appellants were directed to pre-deposit 50% of the confirmed duty demands, with waiver and stay granted only to the balance during the pendency of the appeals.

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