TMI BlogClarification regarding availability of clearance based exemption to the textile tradersX X X X Extracts X X X X X X X X Extracts X X X X ..... to a person (trader) who is getting readymade garments/grey fabrics, manufactured by a job-worker and the total value of turnover of the job-worker is more than the exemption limits i.e. Rs. 30 lakhs/Rs.25 lakhs? Clarification: (a) Notification nos. 34/2003-CE and 35/2003-CE, both dated 30.04.2003, fully exempt first clearance for home consumption upto certain aggregated value (Rs. 30 lakhs or Rs.25 lakhs, as the case may be) of specified goods, subject to certain conditions enumerated in the second paragraph of these notifications. These conditions are with respect to the 'manufacturer'. Clarifications have been sought as to whether, in case of goods manufactured on job work basis, the term manufacturer/manufacturers appearing in these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to enable taking credit of the input duty. These provisions therefore, do not alter the basic position that the job worker remains the manufacturer and any condition (imposed on a manufacturer) in an exemption notification applicable to goods manufactured (whether on his own or on job work) would be applicable to such actual manufacturer i.e. the job worker. (d) Doubts have also been raised as to whether for calculating the clearance value under notification nos. 34/2003-CE or 35/2003-CE, the value of clearance of goods, cleared on job work should also be taken into account. In this regard, it is clarified that the clearance value limits prescribed in these notifications include value of all clearances, whether it is of goods manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llustration are given to explain the above,- Three traders A, B, and C get grey fabrics manufactured from job worker 'X'. The value (raw material cost + job charges) of the goods made on job work for each of the trader is Rs.20 lakhs. Since total clearance value of the job worker is Rs.60 lakhs, he is not eligible to claim any benefit under notification 35/2003-CE. Duty is payable on his entire clearance. Three traders A, B, and C get grey fabrics manufactured from job worker 'X'. In addition, X also clears grey fabrics manufactured by him as independent weaver. His clearance as independent weaver is Rs.15 lakhs. Thereafter, he undertakes job work for A, B and C in a sequential manner. The value of clearances for A is, say, Rs.5 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir premises to the required shape for making readymade garments. The cut fabrics are sent to one job worker, M/s JW for stitching and packing. The packed fabrics are received back by M/s A, M/s B and M/s C. All three persons are availing benefit of Rs.30 lakhs exemption under notification No. 34/2003-Ce individually. M/s A, M/s B and M/s C claim that they are the manufacturers of readymade garments since they are cutting the fabrics to required shapes and are individually eligible for exemption of the said notification, even though the total value of clearance of M/s JW is Rs.90 lakhs. Whether M/s A, M/s B and M/s C are eligible for such exemption ? Clarification: Cutting fabrics to required shape does not make M/s A, M/s B and M/s C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
