SSI exemption eligibility turns on excluding Ordnance Factory clearances made under a concessional notification from aggregate turnover.

Clearances supplied to an Ordnance Factory under Notification No. 64/95-CE were excluded from the aggregate value of clearances for computing eligibility under the SSI exemption in Notification No. 8/2003-CE. The Tribunal treated those supplies as concessional-clearance transactions covered by the specific notification, and held that their exclusion brought the preceding year's turnover below the prescribed threshold. The markings on the goods were only supply identifiers for the Ordnance Factory and did not change the character of the clearances for this computation. SSI exemption under Notification No. 8/2003-CE therefore remained available.

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Issues: Whether the clearances made to the Ordnance Factory under Notification No. 64/95-CE dated 16.03.1995 were liable to be excluded while computing the aggregate value of clearances for the purpose of SSI exemption under Notification No. 8/2003-CE dated 01.03.2003 for the subsequent financial year.

Analysis: The exemption under Notification No. 8/2003-CE was available only if the aggregate value of clearances in the preceding financial year did not exceed the prescribed limit. The clearances to the Ordnance Factory were made under the concessional-clearance mechanism and were covered by Notification No. 64/95-CE. Such clearances were therefore not to be included in the aggregate value computation. Once those clearances were excluded, the turnover for the preceding year fell below the monetary threshold. The markings on the goods were found to be only identifiers for supply to the Ordnance Factory and did not alter the character of the clearances for this purpose.

Conclusion: The clearances to the Ordnance Factory had to be excluded from the aggregate value computation, and the assessee remained eligible for SSI exemption under Notification No. 8/2003-CE.

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