Separate corporate identity prevents clubbing of clearances for small scale exemption where units are independently run and registered.

Common directors or common ownership are insufficient, by themselves, to club clearances of separately incorporated companies for denial of small scale exemption where the units maintain distinct factories, management, staff and registrations. The exemption scheme treats a limited company as a separate manufacturer, and the Board's circular supports separate exemption limits for each company. On the stated facts, the units were independent legal and commercial entities manufacturing different products, so their clearances could not be aggregated and separate small scale exemption remained available.

---

---

Issues: Whether the clearances of two separately incorporated limited companies having common directors, but distinct factories, management, staff and registrations, could be clubbed for denial of small scale exemption.

Analysis: The exemption notification contemplated clearance limits for a manufacturer from one or more factories, and the Board's circular clarified that each limited company is a separate manufacturer entitled to its own exemption limit. The units in question manufactured different products, were separately registered, and functioned as distinct legal and commercial entities. Common directors or common ownership, by themselves, were held insufficient to justify clubbing of clearances in the absence of material showing that the units were not independent.

Conclusion: The clearances could not be clubbed, and the assessee remained entitled to small scale exemption separately.

---