SSI exemption clubbing of clearances upheld where a second unit was found to be only a namesake arrangement.

Clearance values of two units were clubbed for SSI exemption purposes because the evidence showed that both manufactured the same goods and that the day-to-day affairs of the second unit were controlled by the proprietor of the main unit. Unretracted statements of the proprietor, proprietress and buyers indicated that the second entity was only a namesake arrangement, with management and sales handled by the appellant's proprietor. On that basis, the separate existence of the units was not accepted for Notification No. 08/2003-CE, and denial of SSI exemption was sustained.

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Issues: Whether the clearance value of M/s Accurate Engineers was liable to be clubbed with that of M/s Libra Engineering Works for determining eligibility to SSI exemption under Notification No. 08/2003-CE dated 01.03.2003.

Analysis: The units were found manufacturing the same goods and the investigation showed that the day-to-day affairs of M/s Accurate Engineers were controlled by the proprietor of the appellant unit. The statements of the proprietor, the proprietress, and buyers consistently showed that the second unit was only a namesake arrangement, with management and sale activity handled by the appellant's proprietor. These statements remained unretracted and were supported by the surrounding evidence on record. On that basis, the separate existence of the two units was not accepted for SSI exemption purposes.

Conclusion: The clearance values were rightly clubbed and the denial of SSI exemption was sustained.

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