Clubbing of clearances fails where bifurcated units were separately licensed and no concealment was shown.

Separate clearances of bifurcated manufacturing units cannot be clubbed for exemption denial where the Department knew of the split and issued separate licences. The text notes that the business had been divided between family members, the units operated as distinct licensed entities, and the licensing officers were in a position to know the aggregate clearances. On that factual basis, concealment was not established and the demand was held unsustainable. The order dropping the show cause notice was therefore upheld, and the Revenue challenge failed.

---

---

Issues: Whether the clearances of the two bifurcated units were liable to be clubbed so as to deny the exemption and sustain the demand, and whether the demand could survive in the facts of departmental knowledge and separate licensing.

Analysis: The Department was aware that the two sheds originally formed part of a single partnership concern and that the business had later been bifurcated between the mother and the son. Separate licences had been issued to the two units, which showed departmental acceptance of the bifurcation. The units were functioning as separate licensed entities, and the officers issuing the licences were expected to be aware of the likely aggregate clearances. The Tribunal also noted that licensed units would ordinarily file returns and remain subject to periodic excise scrutiny, and the factual plea that the Department could not treat the position as concealed was not unacceptable on the record.

Conclusion: The demand was not sustainable and the Revenue's challenge failed.

Final Conclusion: The order dropping the show cause notice was upheld and the Revenue appeal was dismissed.

Ratio Decidendi: Where the Department knowingly issues separate licences to bifurcated units and the factual matrix shows no concealment of the split, the clearances cannot be upset merely by invoking aggregation of turnover for exemption denial.

---