SSI exemption and clubbing of clearances require real financial interdependence, not merely common shareholders or directors.

Private limited companies are separate manufacturers for small-scale industry exemption purposes, and their clearances cannot be clubbed merely because they share shareholders, directors, premises, or occasional fund movements. The exemption under Notification No. 8/2003-C.E. was held to remain available where the units had separate incorporation, registrations, products, accounts, workforces, and demarcated factory space, and where there was no proof of profit sharing, account manipulation, or real financial flow back. Mere common management or normal commercial dealings was insufficient to treat the units as one manufacturer. On that basis, clubbing of clearances was rejected and the exemption was sustained.

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Issues: Whether the clearances of two private limited companies could be clubbed so as to deny the small-scale industry exemption and sustain the duty demand.

Analysis: The exemption under Notification No. 8/2003-C.E. was denied on the premise that the two units functioned as one manufacturer. The governing board circular clarified that private limited companies are separate entities distinct from their shareholders and each such company is entitled to a separate exemption limit. The record showed separate incorporation, separate registrations, different products, separate accounts and work force, demarcated factory space, and only normal commercial dealings. Common shareholders, common directors, common premises features, or occasional fund movements, without proof of profit sharing, account manipulation, or real financial flow back, were insufficient to establish that the units were a single manufacturer. The cited precedents on clubbing of clearances also supported this approach.

Conclusion: The clearances could not be clubbed and the assessee remained entitled to the exemption.

Ratio Decidendi: Private limited companies are separate manufacturers for SSI exemption purposes, and clubbing of clearances requires cogent evidence of real financial interdependence or flow back beyond common management or ordinary commercial transactions.

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