SSI exemption and clubbing of clearances fail absent proof of dummy units, financial flow-back, or business interdependence.

Clearances of two separately registered units could not be clubbed to deny SSI exemption where the record showed distinct manufacture, no proof that either unit was a dummy or that one's clearances represented clandestine production of the other, and no reliable evidence of mutuality of interest, financial flow-back, or common funding. Mere family relationship, shared address, common trade name, or rent payments between separate entities was insufficient without proof of business interdependence or use of one unit's raw materials by the other. Clubbing was therefore unsustainable, and the duty demand and related penalty could not be maintained.

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Issues: Whether the clearances of the two separately registered units could be clubbed for denying the benefit of SSI exemption under Notification No. 8/2003-CE and sustaining duty demand and penalty.

Analysis: The goods manufactured by the two units were different in nature. The record did not show that one unit was a dummy of the other, or that the clearances of one were actually the clandestinely manufactured goods of the other. The Tribunal found no reliable evidence of mutuality of interest, financial flow-back, or common funding. Payment of rent between separate entities was not treated as evidence of fund flow, and there was no proof that raw materials of one unit were used to manufacture the goods cleared by the other. Mere family relationship, common address, or common trade name usage, without proof of business interdependence, was insufficient to justify clubbing.

Conclusion: The clubbing of clearances was unsustainable, the denial of SSI exemption failed, and the duty demand and connected penalty could not be maintained.

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