SSI exemption clubbing requires proof that separate units are really one manufacturer; common management alone is insufficient.

Clubbing of clearances for SSI exemption was held unsustainable where four separately incorporated and registered units retained independent legal existence. The record did not show that they were dummy concerns, financially financed or floated by the main entity, or that there was any flow back of funds, profit sharing, or common ownership of assets. Mere common management, administrative influence, or ordinary commercial dealings was insufficient to treat them as one manufacturer. In the absence of a clear legal basis under the notification, the exemption could not be denied on clubbing grounds, and reliance on the Board circular did not cure that defect.

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Issues: Whether the turnover of the four SSI units could be clubbed with the main appellant for denial of exemption under Notification No. 1/93-CE dated 28.02.1993.

Analysis: The units were accepted as independently registered private limited companies with separate legal existence. The finding of clubbing rested mainly on alleged administrative and financial control, but the record did not establish that the units were dummy concerns, floated or financed by the main appellant, or that there was any flow back of funds, profit sharing, or combined ownership of assets. Mere common management, influence, or commercial dealings between separate entities was held insufficient to justify clubbing of clearances. The order also did not identify a clear legal basis under the notification to treat the units as one manufacturer, and the departmental reliance on Board Circular No. 6/92 did not cure that defect.

Conclusion: The clubbing of turnover was not legally sustainable and the exemption could not be denied on that basis.

Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Clubbing of clearances for SSI exemption requires a legally supportable basis and proof that separate units are in substance one manufacturer or dummy concerns; mere common management, financial influence, or ordinary commercial dealings do not suffice.

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