Small scale exemption clearances exclude Chapter 39 goods, trading turnover and site job work from aggregate value when not excisable.

The article explains that, for small scale industries exemption under Notification No. 53/88-CE, the aggregate value of clearances should not include goods manufactured from Chapter 3901 to 3915 raw materials where the finished products fall within Chapter 39 and the claim was not properly examined by the lower authorities. It also states that trading activity cannot be loaded into excisable clearances because trading is not excisable, and that job work undertaken at customers' sites was wrongly added to the clearance value. On that basis, inclusion of Chapter 39 goods, trading turnover and site job work in the aggregate clearances was unsustainable, and the demand based on such inclusion could not be maintained.

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Issues: Whether the value of clearances for the purpose of the small scale industries exemption was liable to include goods manufactured under Chapter 39, traded goods and job work activity undertaken at customers' sites.

Analysis: The exemption under Notification No. 53/88-CE was applicable to goods manufactured from raw materials falling within Chapter 3901 to 3915, and the lower authorities had not considered the assessee's claim that the finished products were made from such raw materials. The value attributable to such Chapter 39 goods was therefore not to be included in the aggregate value of clearances. The record also showed that trading activity and site job work were wrongly loaded into the clearances value, even though trading is not excisable and the site fabrication work did not justify inclusion in the assessee's clearance value.

Conclusion: The inclusion of Chapter 39 goods, trading activity and job work value in the aggregate clearances was unsustainable, and the demand based on such inclusion could not be upheld.

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