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2017 (3) TMI 1632 - AT - Central ExciseSSI exemption - clubbing of clearances of job-worker - Held that - job worker has been considered as manufacturer and the value of the goods will be considered in his hand - the value of the goods obtained on the job work basis cannot be included into the turnover of the appellants. Appeal allowed - decided in favor of appellant.
Issues:
- Denial of S.S.I. Exemption due to clubbing turnover of goods manufactured and obtained on job-work basis Analysis: During the period under consideration, the appellant firm was involved in manufacturing and selling handicraft items, some of which were given on a job-work basis to outside units/individuals. The lower authorities combined the value of both the items manufactured by the appellant and those obtained on job-work basis, resulting in the denial of the S.S.I. Exemption. The appellant challenged this decision by filing an appeal against Order-in-Original No. CCE/COMMR./KOL-I/ADJN./No. 3/2010, dated 30-3-2010, covering the period of 2004-05 to 2006-07. After hearing both parties and examining the records, it was observed that the appellant was indeed manufacturing salable goods during the relevant period. Some goods were obtained through job-work by supplying raw materials to external individuals/units. Referring to a precedent set by the Hon'ble Supreme Court in the case of Ujagar Prints v. Union of India, it was highlighted that the job worker is considered as a manufacturer, and the value of goods will be considered in their hands. The Supreme Court emphasized that the value of goods obtained on a job-work basis should not be included in the turnover of the appellants for the purpose of availing the S.S.I. Exemption. Based on the legal principles established by the Supreme Court, the Tribunal concluded that the value of goods obtained on a job-work basis should be excluded from the appellant's turnover calculation. By excluding this value, the turnover of items manufactured by the appellants fell below the threshold prescribed for the S.S.I. Exemption. Consequently, the impugned order denying the exemption was set aside, and the appeals filed by the appellants were allowed with any consequential relief deemed appropriate. The decision was dictated and pronounced in open court by the President of the Tribunal.
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