Separately registered unit deregistration cannot be refused for dues pending against other distinct units of the same assessee.

A separately registered unit cannot be refused deregistration, and refund cannot be denied, merely because liabilities are pending against other distinct units of the same assessee. The governing rules permit surrender of registration and do not make deregistration dependent on dues of another unit. Where the unit seeking deregistration had no recoverable dues outstanding, reference to liabilities of other units was irrelevant, and the cited notification also contemplated deregistration in the absence of recoverable dues. The text further notes that the dues of the other units had already been set aside in higher appellate proceedings.

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Issues: Whether deregistration of a separately registered unit could be refused, and refund denied, merely because dues were pending against other separately registered units of the same assessee.

Analysis: The Rules governing capacity determination and collection of duty permit surrender of registration by the assessee and do not make approval of deregistration dependent upon liabilities of some other unit of the same assessee. The unit seeking deregistration was separately registered, and the record showed that no recoverable dues were pending against that unit. The reference to dues of other units was therefore irrelevant. The cited notification also contemplated deregistration where no dues were pending for recovery. In any event, the dues relating to the other units had already been set aside by the higher appellate forums.

Conclusion: The refusal to deregister the unit and the consequential denial of refund were unsustainable.

Final Conclusion: The Revenue failed to show any infirmity in the appellate orders, and the challenge to the grant of deregistration and refund relief did not succeed.

Ratio Decidendi: Where a unit is separately registered and has no outstanding recoverable dues, deregistration cannot be denied on the basis of liabilities attributed to other distinct units of the same assessee.

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