Clubbing of clearances requires proved financial interlinking and integrated control, not just common partners or shared premises.

Clubbing of clearances is not justified merely because partnership firms have common partners, shared or adjacent premises, or common workers. The decisive test is whether there is proved common funding, financial flowback, profit-sharing, or integrated control over production and sales showing the units are one manufacturer. On the stated facts, no financial interlinking or profit-sharing was established, and the material did not show the degree of integrated manufacturing and sales control required for clubbing. The demand based on treating the three firms as a single unit could therefore not be sustained, and small scale exemption could not be denied on that basis.

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Issues: Whether the clearances of three partnership firms could be clubbed on the ground of common partners, common premises and alleged related-person status, so as to deny small scale exemption and sustain the duty demand.

Analysis: The decisive test for clubbing was whether the units were shown to have common funding, financial flowback, sharing of profits, or such integrated control over production and sales that they were in reality one manufacturer. Mere common partners, family connection, adjacent or shared premises, or common workers were held insufficient by themselves. On the record, no financial interlinking or profit-sharing was proved, and the material did not establish the kind of integrated manufacturing and sales pattern found in cases where clubbing had been upheld.

Conclusion: The clubbing of clearances was unjustified and the demand based on treating the three firms as one unit could not be sustained.

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