SSI exemption turnover excludes merchant-exporter clearances where Form H and export documents establish valid export treatment.

Goods cleared through merchant exporters may be treated as export clearances for SSI exemption purposes where Form H and supporting export documents are produced. The Board circulars recognised Form H as proof of export in such cases, and there was no basis to limit that treatment only to goods exported directly from the manufacturer's premises. On that footing, the value of such clearances could be excluded from aggregate turnover while computing SSI exemption eligibility. The contrary appellate view, which disallowed the deduction on the assumption that the circulars applied only to direct exports, could not be sustained.

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Issues: Whether the value of goods cleared through merchant exporter could be excluded while computing the aggregate value for SSI exemption, on the basis of Form H and the applicable Board circulars.

Analysis: The exemption dispute turned on whether clearances made by exempted units through merchant exporters could be treated as exports for the purpose of reducing the aggregate turnover. The original authority accepted Form H as proof of export in terms of the Board circulars and allowed deduction of the export value from the aggregate clearances. The appellate authority rejected that deduction on the view that the circulars applied only to direct manufacturer exports. The record showed, however, that the goods were cleared for export through merchant exporters and the supporting export documents were produced. The Board circulars specifically recognized Form H as proof of export in such cases, and there was no basis to confine that treatment only to exports made directly from the manufacturer's premises.

Conclusion: The deduction of the value of goods exported through merchant exporters was valid, and the appellate order disallowing that deduction could not be sustained.

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