SSI exemption cannot be denied merely because other units of the same manufacturer pay duty and avail Cenvat credit.

SSI exemption under Notification No. 8/2003-CE could not be denied to one factory merely because other units of the same manufacturer were paying duty and availing Cenvat credit. The notification did not require a common option or compulsory uniform treatment across all factories, and its terms could not be expanded by implication. If the Department intended to deny exemption on a combined basis, it had to proceed on the aggregate value of clearances of all units, but the demand was not framed on that footing. The exemption was therefore upheld, and the connected demand and penalties did not survive.

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Issues: Whether SSI exemption under Notification No. 8/2003-CE could be denied to the Rohad unit solely because the assessee's other units were paying duty and availing Cenvat credit.

Analysis: The denial of exemption rested only on the premise that two other units of the same manufacturer were paying duty, so the option for duty payment or exemption had to extend to all factories. The relevant notification condition did not impose such a requirement. If the Department sought to deny SSI exemption on a combined basis, it had to proceed on the aggregate value of clearances of all units, but the demand was not framed on that footing. The notification could not be read to create an obligation that was not expressed in its terms.

Conclusion: The exemption could not be denied on the stated ground, and the issue was decided in favour of the assessee.

Final Conclusion: The assessee's entitlement to SSI exemption was upheld and the connected demand and penalties did not survive.

Ratio Decidendi: SSI exemption cannot be denied merely because other units of the same manufacturer are paying duty unless the notification expressly requires a common option or combined treatment of all factories.

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