Factory identity and clearance clubbing under exemption notification fail without proof that leased premises are the same manufacturing unit.

Exemption under Notification No. 43/82-C.E. depended on whether the leased premises were proved to be the same factory unit previously used by M/s. Allvee Dye Chemicals, because Clause 2(ii) permitted clubbing only where clearances from the same factory by or on behalf of one or more manufacturers exceeded the prescribed limit in the preceding financial year. In the absence of a lease deed, approved ground plan, or other evidence showing that the exact portion earlier occupied had been transferred and continued as the same factory, clubbing of prior clearances was not sustainable. The respondents were therefore entitled to the exemption, and denial based on the earlier clearances was unjustified.

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Issues: Whether the respondents were entitled to exemption under Notification No. 43/82-C.E. for the clearances made from the leased premises, and whether the prior clearances of M/s. Allvee Dye Chemicals from the original factory could be clubbed with the respondents' clearances for applying the monetary limit under Clause 2(ii).

Analysis: Clause 2(ii) of Notification No. 43/82-C.E. denied exemption where the aggregate value of clearances from any factory by or on behalf of one or more manufacturers exceeded the prescribed limit in the preceding financial year. The decisive question was whether the premises leased to the respondents were shown, on evidence, to be the very same factory unit in which M/s. Allvee Dye Chemicals had been manufacturing during the relevant period. No lease deed, approved ground plan, or other material was produced to establish that the exact portion earlier used by M/s. Allvee Dye Chemicals had been transferred and continued as the same factory for the respondents. In the absence of such proof, clubbing of clearances could not be sustained.

Conclusion: The respondents were entitled to the exemption, and the denial of exemption on the basis of prior clearances of M/s. Allvee Dye Chemicals was not justified.

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