I may summarise the questions and answers as under:
Question 1. Is the job-work turnover to be included in computing exemption limit of Rs. 1.5 Crores?
Answer: Firstly, if the process undertaken by you does not amount to manufacture, the job-charges are not to be counted while computing the exemption limit.
However, if the process amounts to manufacture, the Job-work turnover will not be included if the following two conditions are satisfied:
a. The principal (for whom you are doing job-work) has a factory and is engaged into manufacture of the goods.
b. The principal supplies you any one of the following:
- He supplies material under challan under Rule 4 (5) of Cenvat Credit Rules, 2004 (he can do this only if he is registered with excise, avails credit on the input & pays duty on the final product)
- He gives an undertaking under notification 214/86-CE to your Division office and supplies material to you under challans mentioning that it is a supply for job-work under notification 214/86-CE (He can do this only if he pays duty on the final product).
- He gives an undertaking under notifications 83/94-CE and 84/94-CE, to your Division office and supplies material to you under challans mentioning that it is a supply for job-work under notification 83/ 94 & 84/94 –CE (He can do this if he too is a SSI unit and does not pay duty on the final product because his turnover is below 1.50 Crores).
If the conditions are not satisfied, then you will have to count in your exemption limit
a. The job-charges; as well as
b. The cost of material supplied free by the principal.
Question 2. Whether supplies made to government institutions under notification 10/97-CE are to be included within 1.5 Crores exemption limit.
Answer: No. In fact any supply which is exempted from excise duty, is not to be included in the exemption limit of 1.5 Crores. Obviously, one must fulfill conditions of the exemption notification.
Question 3: A SSI unit has total turnover of Rs. 500 lacs, out of which goods valued at Rs. 200 lacs were cleared under band name of another person. Is the unit entitled to exemption.
Answer: Let’s assume that the above said turnovers were during the year 2007-08 and that we want examine availability of exemption in the year 2008-09.
For the purpose of computing clearance limit of 400 lakh in the previous financial year, the value of goods bearing brand of another person is not to be included. Thus, previous years turnover would be only 3 lakhs.
(Ref. paragraph 3A to the notification 8/2003). In the current year, he would be entitled to clear goods (without another persons brand) under exemption till 150 lakh.
Question 4: What is the turnover limit for registration under C. Excise?
Answer: Notification 36/2001-CE (NT) exempts a person from registration if his goods are exempted or are chargeable to nil duty. [However, they are required to file a declaration in April every year. SSI units are required to file the declaration when their turnover crosses Rs. 90 Lakh. Others are to file it from the very beginning. Practically very few units file such declaration]
Thus, one needs to get registered only if he becomes liable to pay duty. In case of units availing SSI exemption they need not obtain registration till their turnover reaches 1.50 Crores. However, if the unit desires to pay duty even before his turnover reaches the limit, he will have to take registration.
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