SSI clubbing and Chapter 94 classification turn on independent existence and marketability of site-installed structures.

Clearances of separate units cannot be clubbed to deny small scale industry exemption unless there is affirmative evidence of mutuality of interest, financial flow-back, or lack of independent existence; common management and family connection alone are insufficient. Modular office partitions and workstations assembled and installed at site, which are fixed in place and do not emerge as movable, marketable goods, are not excisable furniture under Chapter 94. On these principles, the article states that the revenue failed on both clubbing and classification, and the duty demand and penalties were set aside.

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Issues: (i) whether the clearances of the three units could be clubbed for denying small scale industry exemption; and (ii) whether modular office partitions and workstations were classifiable as excisable furniture under Chapter 94.

Issue (i): whether the clearances of the three units could be clubbed for denying small scale industry exemption.

Analysis: The units had separate constitution, registrations and business identities. The record did not establish financial flow back, commonality of funds, or other material showing that the two concern units were mere fac ades or dummy units. Common managerial influence and family relationship, by themselves, were held insufficient to justify clubbing of clearances.

Conclusion: The clearances could not be clubbed and denial of SSI exemption was not sustainable.

Issue (ii): whether modular office partitions and workstations were classifiable as excisable furniture under Chapter 94.

Analysis: The activity consisted of procurement, assembly and installation of components at the customer's site. The evidence showed that the resulting structures were fixed at site, lacked movability as such, and did not emerge as a distinct marketable commodity. On that basis, the goods could not be treated as manufactured furniture or a collective item falling under Chapter 94.

Conclusion: The goods were not correctly classifiable as excisable furniture under Chapter 94.

Final Conclusion: The Revenue failed on both the clubbing and classification issues, and the order setting aside the duty demand and penalties was sustained.

Ratio Decidendi: Clubbing of clearances requires affirmative evidence of mutuality of interest or lack of independent existence, and site-installed structures that are not movable or marketable do not amount to excisable furniture.

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