Clubbing of clearances requires proof of dummy unit status and mutuality of interest; separate entities keep SSI exemption intact.

Clearance value of an associated unit cannot be clubbed with a respondent for denying SSI exemption where the two entities are separate legal persons and the facts do not establish one as a dummy unit of the other. Here, a partnership firm and a private limited company were found to have dealt through commercial transactions, including fund movements and job-work arrangements, without the mutuality of interest needed to justify clubbing of clearances. On that basis, the associated unit's clearances could not be aggregated with the respondent's, and denial of SSI exemption under Notification No. 9/2001-C.E. was not sustainable.

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Issues: Whether the clearance value of the associated unit could be clubbed with the respondent for denying SSI exemption under Notification No. 9/2001-C.E. dated 01.03.2001.

Analysis: The associated unit was a partnership firm and the respondent was a private limited company. On the facts found, the relationship between them did not justify treating the partnership firm as a dummy unit of the respondent. Their dealings, including fund movements and job-work transactions, were held to be commercial transactions between separate entities and not evidence of such mutuality of interest as to warrant clubbing of clearances.

Conclusion: The clearance value of the associated unit could not be clubbed with the respondent, and the denial of SSI exemption was not sustainable.

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