Value of Goods obtained on Job-Work basis must be Excluded from Turnover for the Purpose of SSI Exemption: CESTAT Kolkata [Read Order]

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In M/s.Hitachi K.K.Manufacturing Co v. CCE, the Kolkata bench of the CESTAT held that while computing SSI limit under the Central excise law, value of the goods obtained on the job-work basis should not be included in the turnover.

Coming to the facts of the case, the appellant Firm engaged in both manufacturing and job work activities. The authorities denied the appellants claim for SSI exemption by combining the value of both the items which were manufactured by themselves and also which were obtained from outside on the basis of job-work.

The bench found that during the relevant period, the appellant was manufacturing salable goods. Some goods were obtained by supplying the raw materials to outside individuals/units.

The bench noticed that in the case of Ujagar Prints, ETC. ETC. v. Union of India & Others, the Apex Court held that job-worker is manufacturer for the purpose of the Act and the value of the goods will be considered in his hand.

Quashing the order the bench said that “Hence, as per the ratio laid down by the Honble Supreme Court, the value of the goods obtained on the job-work basis cannot be included into the turnover of the appellants. By excluding this value the items manufactured by the appellants comes below the limit prescribed for the S.S.I. Exemption.”

Read the full text of the order below.

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