SSI exemption and clubbing of clearances fail where two units retain separate existence and no dummy arrangement is proved.

Clubbing of clearances for denial of SSI exemption was not justified where two units used a common expression that formed part of their name rather than another person's registered brand name. Separate statutory registration, distinct manufacturing facilities, absence of reliable proof of common workers, and only occasional inter-unit fund transfers did not show that either concern was a sham or dummy unit. CESTAT held that clubbing requires a clear finding that one unit lacks independent existence, which was not established. The demand was therefore unsustainable and the denial of SSI exemption was unwarranted; Revenue's appeal was rejected.

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Issues: Whether the clearances of two units could be clubbed for denial of SSI exemption on the basis of common brand name, common management, shared premises, workers and inter-unit fund transfers under Notification No. 8/2003-C.E. dated 01.03.2003.

Analysis: The common expression used by both units was found to be part of their name and not a registered brand name of another person. The record did not establish that either unit was a sham or that one was a dummy of the other. Separate registration with statutory authorities, distinct manufacturing facilities, absence of reliable evidence of common workers, and only occasional reciprocal financial transactions recorded in the books did not justify treating the two concerns as one. Clubbing of clearances requires a clear finding as to which unit lacks independent existence, which was absent here.

Conclusion: The demand could not be sustained and the denial of SSI exemption was unwarranted; the appeal by Revenue was rejected and the order in favour of the assessee was upheld.

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