Small-scale exemption turnover test excludes retail sales of bought-out garments from the assessee's aggregate clearances.

For small-scale exemption under Notification No. 8/2002, only the assessee's own clearances for home consumption during the relevant period could be included in the aggregate value of clearances. Goods already assessed in the hands of the physical manufacturer could not be counted again against a merchant-manufacturer at the retail stage, and the phrase "whether on payment of duty or otherwise" applied to the manufacturer's clearances, not to turnover from bought-out goods. As the assessee had no physical manufacturing facility in April 2001, the value of ready-made garments sold on job work or retail basis was not includible, and the assessee remained eligible for the exemption.

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Issues: Whether, for the purpose of condition 3 to Notification No. 8/2002 dated 01.03.2002, the value of clearances in April 2001 of ready-made garments sold by the assessee on job work or retail basis could be included in the aggregate value of clearances for determining eligibility to small-scale exemption.

Analysis: The relevant expression in the notification required inclusion only of the assessee's clearances for home consumption during the specified period. Clearances already assessed in the hands of the physical manufacturer could not again be attributed to the merchant-manufacturer at the retail stage. The phrase "whether on payment of duty or otherwise" was held to apply to clearances of the manufacturer concerned and not to retail sales turnover of bought-out goods. Since the assessee had no physical manufacturing facility in April 2001, the value of such sales could not be counted against it for the exemption threshold.

Conclusion: The April 2001 turnover of ready-made garments on job work basis was not includible in the assessee's aggregate clearances, and the assessee remained entitled to the exemption.

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