Factory-wise small-scale exemption barred clubbing of State Government workshop clearances for denying eligibility.

A small-scale exemption under Notification No. 8/2003-C.E. was construed factory-wise for workshops belonging to or maintained by a State Government, so their clearances could not be clubbed to deny eligibility. The Tribunal distinguished earlier Revenue reliance because those decisions concerned different notifications and lacked the explanatory provision governing this exemption. On that footing, each establishment had to be examined separately for exemption entitlement, and the duty demand based on clubbing was not sustainable.

---

---

Issues: Whether clearances from workshops belonging to or maintained by the State Government could be clubbed for denying the small-scale exemption under Notification No. 8/2003-C.E. dated 01.03.2003.

Analysis: The exemption notification was construed as treating each factory belonging to or maintained by the State Government as independently eligible for the turnover-based exemption. The earlier Tribunal decision relied upon by Revenue was distinguished because it turned on different notifications and did not contain the explanatory provision that governed the present exemption. The contrary reliance placed by Revenue did not displace the later Tribunal view that each such establishment had to be examined separately for eligibility.

Conclusion: The clearances could not be clubbed in the facts of the case, and the respondent remained entitled to the exemption to the extent available under Notification No. 8/2003-C.E. dated 01.03.2003.

Final Conclusion: The duty demand was not sustainable on the ground of clubbing, and the Revenue appeals failed.

Ratio Decidendi: Where a small-scale exemption notification specifically provides that goods manufactured in a factory belonging to or maintained by the State Government are to be assessed factory-wise, the clearances of such factories cannot be clubbed for denying the exemption.

---