Clubbing of clearances denied where separate units were independently registered and manufacturing-capable, preserving small scale exemption.

Clearances of two units could not be clubbed to deny small scale exemption where each unit was independently registered, separately equipped, and capable of manufacturing on its own. Mere common family control or overlapping management was insufficient to treat one unit as a dummy of the other in the absence of financial intertwining or evidence that one operated under the guise of the other. The Revenue's challenge therefore failed and the small scale exemption was upheld.

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Issues: Whether the clearances of two units could be clubbed for denial of small scale exemption on the ground that they were dummy units of each other.

Analysis: The units were found to be independently registered and separately equipped to manufacture their products. No material established that one unit was operating under the guise of the other or that there was financial intertwining or lack of independent manufacturing capability. Mere common family control or overlap in management was held insufficient to justify clubbing of clearances when each unit was otherwise independent and self-sufficient.

Conclusion: The clearances could not be clubbed and the Revenue's challenge to the grant of small scale exemption failed.

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