SSI Units and Job Work - Central Excise Practice Manual (OLD) - Central Excise

SSI Units and Job Work Sometimes the SSI units send his material at the raw material or semi-finished stage to another unit (or job worker) for undertaking certain processing. In such case The SSI unit can clear the material to the Job worker without payment of duty, job worker can carry out job work on material sent by SSI and return the processed goods to SSI unit without payment of duty, and The SSI unit can do further processing on these inputs and clear his final product without payment of duty if his turnover is below Rs.150lakhs. For this purpose, i.e. to send goods for job work, SSI unit has to file two declarations with the Assistant/Deputy Commissioner: - 1. First, with his division that goods returned after job work will be used in his factory for manufacture of products exempt from duty (Notification No.84/94 dated 11-4-1994). 2. Second, with the division having jurisdiction over factory of job worker that the goods will be used by him after job work in manufacture of final product which is exempt from duty. Now this exemption has been extended to certain other products as specified in the notification (Notification No.83/94 dated 11-4-1994). Goods which are completely exempt from duty can also be sent outside for job work and return. Job Worker: 1. Processing undertaken by the job worker may be a whole process resulting in manufacture of finishing of the article or it may be any other process such as painting, welding, threading, machining, punching etc.. 2. Though the job worker is not required to pay duty on such material, but should maintain proper records. Procedure has been prescribed for this purpose. 3. Job worker may be a small scale industry or it may be a large scale industry. Assessable Value: Please see chapter on Valuation.