Availment of higher notional credit under Rule 57B - Instructions regarding - Central Excise - 50/88-CX.8

Availment of higher notional credit under Rule 57B - Instructions regarding Circular No. 50/88-CX.8 Dated 20-9-1988 [From F. No. 267/31 /88-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, New Delhi Subject : Availment of higher notional credit under Rule 57B - Instructions regarding. I am directed to say that doubts have been raised regarding the applicability of S.S.I. exemption on the goods manufactured on job charges basis out of raw material supplied by Principal manufacturer to job workers. The matter has been examined by the Board in consultation with the Law Ministry. It has been advised by the Ministry of Law that if the goods manufactured on job charges basis (on account of Supplier of raw material), are covered by relationship as is contemplated by Notification No. 305/77-C.E., dated 5-11-1977 then the same should be treated as goods manufactured by supplier of raw material (Principal Manufacturer) and the liability of duty should be decided accordingly. Therefore if the inputs are supplied by the Principal manufacturer for the manufacture of any goods on job work basis, then the same would not be entitled for small scale exemption (unless Principal manufacturer himself is entitled to Small Scale Industries Exemption) even if the job worker is otherwise entitled for the small scale exemption. The advise of Ministry of Law has been accepted by the Board. It has also been observed by the Board that for determining the eligibility of job work for small scale exemption, the clearance of goods manufactured on job charge basis by the job worker as well as those manufactured in his own account would be taken into consideration as per para 3 of Notification No. 175/86, dated 1-3-1986 as both categories of goods would have been manufactured in one factory only (that is of the job worker). This disposes of CCE Nagpur's C. No. IV(6)11/87/P/10983, dated 9-2-1988 and CCE Bombay's F. No. V.T. 3/CH. 74(30)5/88/4632, dated 28-4-1988. The above instructions may be brought to the notice of the field formations. Trade interests may also be suitably informed. Receipt of this letter may please be acknowledged.