SSI export clearances through merchant exporters can be excluded from aggregate value when export documents and sales tax forms correlate.

Clearances by an SSI unit to merchant exporters can qualify as export clearances if supported by Form H/Form 14B and other export-related documents linking the manufacturer's supplies to actual exports. The Board's simplified export procedure recognises such sales tax forms as proof of export, and direct shipment from the factory to the port is not mandatory where the clearances can be correlated with invoices, bill of lading and merchant exporter certificates. On that basis, the goods were treated as exported and excluded from the domestic aggregate value for SSI exemption, so the proposed demand, interest and penalties could not survive.

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Issues: Whether clearances made by an SSI unit to merchant exporters, supported by Form H/Form 14B and export-related documents, could be treated as export clearances and excluded from the aggregate value of clearances for SSI exemption.

Analysis: The Board's circular on simplified export procedure for exempted SSI units accepted Sales Tax forms such as Form H or Form 14B as proof of export where goods were cleared through merchant exporters. The essential question was not whether the goods moved directly from the factory to the port, but whether the manufacturer's clearances could be correlated with the merchant exporter's export documents and sales tax forms. The documents on record, including Form H/Form 14B, invoices, bill of lading and certificates from merchant exporters, established that the goods supplied by the appellant had been exported. The contrary view that direct export from the manufacturer's premises was mandatory was held to be too narrow and inconsistent with the Board's circular and the purpose of the simplified export procedure.

Conclusion: The clearances were held to be export clearances and not includible in the domestic aggregate value for SSI exemption; the demand, interest and penalties could not survive.

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