Fully exempt job-work clearances are excluded from small-scale exemption turnover computation under excise notifications.

Fully exempt intermediate goods manufactured by a job worker from raw materials received under Rule 57F(2) and cleared under Notification No. 214/86-C.E. are not included in the aggregate value of clearances for determining eligibility under Notification No. 175/86-C.E. The operative principle is that clearances enjoying complete exemption are excluded from the small-scale exemption turnover computation, so the departmental challenge to such exclusion fails. This preserves the availability of the small-scale exemption where the relevant job-work clearances are already covered by a separate exemption notification.

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Issues: Whether intermediate excisable goods manufactured by a job worker from raw material received under Rule 57F(2) and cleared under Notification No. 214/86-C.E. are to be included in computing the aggregate value of clearances for availing exemption under Notification No. 175/86-C.E.

Analysis: The goods were manufactured by the job worker from raw materials received from the principal manufacturer under Rule 57F(2) and were covered by the exemption under Notification No. 214/86-C.E. The clearances of such fully exempt goods were, therefore, not liable to be counted for determining the aggregate value of clearances for the small scale exemption under Notification No. 175/86-C.E.

Conclusion: The clearances of the job-worker's exempt goods were not includible in the aggregate turnover computation under Notification No. 175/86-C.E., and the Revenue's appeal failed.

Final Conclusion: The exemption available to the job-worker's clearances was upheld, and the departmental challenge to the exclusion of such clearances from the small scale exemption calculation was rejected.

Ratio Decidendi: Fully exempt clearances of job-worked intermediate goods are not to be included in the aggregate value of clearances for the purpose of determining eligibility under a small scale exemption notification.

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