Merchant exporter supplies supported by Form 14B qualify as export clearances for SSI exemption, subject to factual verification.

Goods sold to a merchant exporter and backed by Form 14B were treated as export clearances for SSI exemption purposes, because the sales tax form correlated the manufacturer's invoice with the actual export and satisfied the simplified export procedure for exempted units. A narrow view that export must take place directly from the manufacturer's factory was rejected, as the manufacturer's role ends on supply to the merchant exporter and the export documentation is completed thereafter. Clearances so supported are excluded from the aggregate value of clearances, subject to factual verification that the relevant supplies were covered by Form 14B. The matter was remanded for that correlation check.

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Issues: Whether clearances of branded goods sold to a merchant exporter and evidenced by Form 14B were to be treated as export clearances for the purpose of SSI exemption and excluded from the aggregate value of clearances under the relevant exemption notifications.

Analysis: The goods were admittedly sold to a merchant exporter and physically exported thereafter. The sales tax Form 14B contained the appellant's invoice details and correlated the supplies with the export. The Board's circular prescribing a simplified export procedure for small scale exempted units accepted the sales tax form or an equivalent form as proof of export. The reasoning that the goods were not exported directly from the manufacturer's factory was held to be too narrow, because the manufacturer's role ends at supply to the merchant exporter and the export documentation is then completed by the merchant exporter. The relevant earlier tribunal view was followed, and the factual verification whether all such clearances were covered by Form 14B was found necessary.

Conclusion: Such clearances are to be treated as export clearances if supported by Form 14B and are not includible in the aggregate value for SSI exemption; the matter was remanded for verification of the factual correlation.

Ratio Decidendi: Under the simplified export procedure for exempted units, supplies to a merchant exporter supported by the prescribed sales tax form constitute proof of export and cannot be denied SSI exemption merely because the goods were not exported directly from the manufacturer's factory.

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