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TMI Blog2019 (3) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate value of clearances for home consumption and not separately regarding individual clearances . The extent of limits was raised by subsequent Notification dated 17.05.2003. 3 Introduced on 25.03.2003 - The Exemption Notification does not put the matter at individual clearances of job workers and what is to be considered is an aggregate value of the clearances. It is well settled that if a legal fiction is introduced that legal fiction must be taken to the logical end. If the contention of the Appellant is accepted, a dealer may get the goods referred to in Rule 12B manufactured from several job workers to ensure that the value of the clearances from each job worker is less than the limit prescribed for individual clearances. In such a case the emphasis in the Rule regarding aggregate clearances would be rendered meaningless. The assessment made by the Appellate Authority and the Tribunal was, therefore, correct - Consequently, it was not the individual clearance of one single job worker alone exceeding the limit of ₹ 25 lakhs but the aggregate of all clearances made by the Appellant, was liable to duty. Appeal dismissed. - Civil Appeal Nos. 9740-9741 of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r may make an option to undertake the activities mentioned in this sub-rule as an agent or person authorized by the said person and in such a case, the said job worker shall be deemed to be the said person . 4. Soon thereafter Exemption Notification was issued by the Government of India on 30.04.2003 wherein exemption was granted for clearances upto ₹ 20 lakhs in respect of processes falling under Chapters 51, 52, 54, 55, 58 or 60 of the First Schedule to the Tariff Act. The substantive part of the Notification was as under: In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts first clearances for home consumption, upto an aggregate value not exceeding twenty lakh rupees made on or after the 1st day of April in any financial year, of fabrics, not subjected to any process falling under Chapter 51, 52, 54, 55, 58 or 60 of the First Schedule to the Central Excise Tariff Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacturer shall keep all documents relating to purchase of yarns; 5. By further Notification No.47/2003-CE dated 17.05.2003 the earlier notification dated 30.04.2003 was amended as under: S.No. Notification No. and date Amendments (1) (2) (3) 1 34/2003- Central Excise, dated the 30th April, 2003 In the said notification, - (i) for the words thirty lakh rupees wherever they occur, the words forty lakh rupees shall be substituted; (ii) for the words twenty five lakh rupees wherever they occur, the words thirty lakh rupees shall be substituted. 2 35/2003- Central Excise, dated the 30th April, 2003 In the said notification (i) for the words twenty five lakh rupees wherever they occur, the words thirty five lakh rupees shall be substituted; (ii) for the words twenty lakh rupees wherever they occur, the words twenty five lakh rupees shall be substituted. 3 36/2003- Central Excise, date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal clearance value of X exceeds ₹ 35 lakhs eligibility limit. Consequently, the entire clearance of X would become dutiable and duty demand would arise against all i.e. A , B , C and X on their respective clearances. A trader A gets grey fabrics manufactured by job workers X , Y and Z and the total clearance value of each of these job workers is below ₹ 25 lakhs. All the clearances from the job workers are within the exemption limit for individual units. The trader has no obligation to register himself or pay duty in terms of Rule 12B. In other words, he is out of the scope of the provisions of Rule 12B. 7. During the period from April 2003 to January 2004 the Appellants had cleared cotton fabrics to the tune of ₹ 1,70,12,745/- and cotton made-ups to the tune of ₹ 7,82,635/- without paying any duty as according to them the liability was only on the job workers who were the actual manufacturers and that there was no liability on the trader. Two show cause notices were issued on 07.07.2004 and 14.01.2005 by the Department demanding duty of ₹ 12,28,801/- (BED) and ₹ 3,07,201/- (AED) vide the first notice and ₹ 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te value is more than ₹ 57 lakhs in the case of job worker M/s Dinesh weaving Mills. Thus, the statutory limit of ₹ 25 lakhs has been crossed. When it is so, then the appellant is not entitled for the exemption. 11. A Rectification Application was thereafter filed by the Appellants which was also dismissed by the Tribunal on 15.06.2018. 12. The Appellants have challenged the aforesaid Orders dated 06.02.2018 and 15.06.2018 passed by the Tribunal, in this appeal. We heard Mr. S. Durai Raj, learned Advocate for the Appellants and Mr. V. Shekhar learned Senior Advocate for the Respondent. It was submitted by the Appellants that in terms of the Circular dated 30.10.2003, the duty could not be demanded if the value of clearance of job workers was less than ₹ 25 lakhs individually and the Revenue could raise demand only in respect of the clearance value of that job worker, where the value was in excess of ₹ 25 lakhs. The Revenue on the other hand submitted that in terms of said Circular, if the clearance value of even one job worker were to be in excess of ₹ 25 lakhs, the dealer would be liable in respect of the clearances of all the job workers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n makes it clear that the entire clearances of the job worker would become dutiable. The third illustration however strikes a slightly different note and says that if a trader got grey fabrics manufactured by three job workers and the clearance value of each of those job workers was below ₹ 25 lakhs, the trader had no obligation and would be out of the scope of the provisions of Rule 12B. 16. We find it difficult to accept how the emphasis in the Exemption Notification on the aggregate value could be diluted and the trader would not be liable on the aggregate value in the third illustration. If Rule 12B introduces a premise that if the conditions in said Rule are satisfied, the person concerned is an assessee for all purposes, it does not stand to reason how third illustration fits in the scheme of Rule 12B as well as the Exemption Notification. What Rule 12B introduces is nothing but a legal fiction that in case the conditions stipulated therein are satisfied, the person concerned is to be treated as an assessee. If he is an assessee, all the clearances by him so long as they come within the parameters of Rule12B, would make him liable. The Exemption Notification again do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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