Clubbing of clearances fails without corroboration; separate units and SSI exemption stand where evidence is only an estimate.

Clubbing of clearances and denial of SSI exemption require clear evidence of mutuality of interest, financial flow back, dummy operations, or other material showing that two units are not independently ing. Here, the duty demand rested mainly on an uncorroborated statement and rough turnover estimate, without verification of raw materials, buyers, clearances, or supporting records of clandestine removal. Separate premises, funding, machinery, workers, licences, and returns supported the distinct identity of the units. On that basis, the clearances could not be clubbed, and the duty demand, interest, and penalties were not sustainable.

---

---

Issues: Whether the clearances of two units could be clubbed and the duty demand, interest and penalties sustained on the basis of an uncorroborated statement, and whether the units were entitled to Small Scale Industry exemption.

Analysis: The demand rested substantially on a statement estimating turnover, but no corroborative inquiry was made into raw materials, clearances, buyers, or related records to establish exact unaccounted turnover or clandestine removal. The record also did not show mutuality of interest, financial flow back, dummy nature, or other evidence necessary to club two independently existing units. Separate premises, separate funding, separate machinery, workers, licenses, and returns supported the finding that the units were distinct legal entities. An approximate admission, without supporting verification and documentary corroboration, was insufficient to uphold the duty computation or deny exemption.

Conclusion: The clearances could not be clubbed, the duty demand was not sustainable, and the findings allowing SSI exemption and rejecting interest and penalties were affirmed in favour of the assessee.

Final Conclusion: The Revenue's appeals failed because the impugned order had rightly held that the two units were independent and that the duty demand based on unverified estimates could not stand.

Ratio Decidendi: Clubbing of clearances and denial of exemption require clear evidence of mutuality of interest, financial flow back, or dummy operations, and a mere uncorroborated admission or rough estimate of turnover is insufficient to sustain a duty demand.

---