SSI exemption continues despite delay in permanent certificate where registration and status remain uninterrupted

Exemption under Notification No. 175/86 was treated as available from the date an SSI unit was registered with the competent authority under the Industries (Development and Regulation) Act, 1951. A temporary lapse between expiry of a temporary SSI certificate and issue of the permanent certificate did not, by itself, mean that the unit ceased to be an SSI unit, where permanent registration had been applied for before expiry and SSI status remained continuous. On that basis, the demand founded on an alleged break in certification was held unsustainable.

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Issues: Whether the assessee was entitled to the benefit of Notification No. 175/86 for the period between expiry of the temporary SSI certificate and issue of the permanent SSI certificate, and whether the unit ceased to be an SSI unit during that interval.

Analysis: The unit had been registered as an SSI unit from an earlier date, had applied for permanent registration before the temporary certificate expired, and the permanent certificate was issued later. The exemption was held to attach from the date of registration with the competent authority under the Industries (Development and Regulation) Act, 1951. The intervening time lag between expiry of the temporary certificate and issue of the permanent certificate did not mean that the unit ceased to be an SSI unit, particularly when the permanent certificate itself reflected the date of production and the unit's SSI status remained continuous.

Conclusion: The assessee was entitled to the exemption under Notification No. 175/86, and the demand based on the alleged break in SSI certification was unsustainable.

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