SSI exemption survives factory relocation where the manufacturer had already been availing the benefit and relaxed registration conditions were met.

Exemption under Notification No. 175/86-C.E. was held to attach to the manufacturer, so a shift of factory premises and later amendment or reissue of the SSI certificate did not, by itself, justify denial of the benefit. The turnover condition was not shown to be breached, and the interim period between shifting and formal amendment remained covered because the manufacturer had been availing the exemption in the preceding financial year and satisfied the relaxed registration condition in paragraph 4(b). The departmental appeals therefore failed and the exemption orders were sustained.

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Issues: (i) Whether exemption under Notification No. 175/86-C.E. dated 01.03.1986 could be denied merely because the factory shifted to a new premises and the Directorate of Industries certificate was amended or reissued later; (ii) whether the assessee could still claim the benefit of paragraph 4(b) of the notification during the intervening period after shifting of the factory.

Issue (i): Whether exemption under Notification No. 175/86-C.E. dated 01.03.1986 could be denied merely because the factory shifted to a new premises and the Directorate of Industries certificate was amended or reissued later?

Analysis: The exemption was treated as one attached to the manufacturer and not confined to a particular factory location. The change of address in the SSI certificate, or the issuance of a fresh certificate after shifting, did not justify denial of the exemption for the period between shifting and formal amendment. The turnover condition was also not shown to have been breached.

Conclusion: The assessee was entitled to continue availing the exemption despite the shift in factory premises, and denial solely on the ground of a pending amended certificate was not justified.

Issue (ii): Whether the assessee could still claim the benefit of paragraph 4(b) of the notification during the intervening period after shifting of the factory?

Analysis: Paragraph 4 imposed a registration requirement, but the proviso relaxed that requirement in specified situations, including where the manufacturer had been availing the exemption in the preceding financial year. The respondents had in fact been availing the exemption in the preceding year, and the temporary absence of a certificate linked to the new address did not take the case outside the relaxed condition in paragraph 4(b).

Conclusion: The assessee satisfied the relaxation under paragraph 4(b) and was not disqualified during the intervening period.

Final Conclusion: The departmental appeals failed, and the orders granting the exemption were sustained.

Ratio Decidendi: A small-scale industry exemption framed with reference to the manufacturer cannot be denied merely because the factory shifts premises, and the intervening period remains covered where the manufacturer had already been availing the exemption and otherwise satisfies the notification's relaxed conditions.

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