SSI exemption and clubbing of clearances require proof of real interdependence, not merely common family ownership or accounting support.

Clubbing of clearances for denial of small scale exemption under Notification No. 08/2003-CE requires proof of common control, financial intermingling, mutuality of interest, dummy operations, or other evidence that the units lack independent existence. Mere common family ownership and use of a common accountant are insufficient to aggregate the clearances of separate manufacturing units. In the absence of such proof, each unit's independent identity must be respected and SSI exemption cannot be denied on a clubbing theory.

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Issues: (i) Whether the clearances of the manufacturing units could be clubbed for denial of small scale exemption under Notification No. 08/2003-CE dated 01.03.2003.

Analysis: The Revenue was required to establish common books of account, common bank accounts, common tax registrations, common funding, mutuality of interest, financial flow back, or that the units lacked independent manufacturing existence. Mere common family ownership and maintenance of accounts by a common accountant were held insufficient to treat the units as one. In the absence of evidence showing that the units were dummy or that their clearances were required to be aggregated, the independent identity of each manufacturing unit was accepted.

Conclusion: The clearances could not be clubbed and denial of SSI exemption was not sustainable; the demand confirmed on that basis was liable to be set aside in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Clubbing of clearances for SSI exemption cannot be sustained unless the Revenue proves common control and financial intermingling showing that the units are not genuinely independent.

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