SSI Exemption - Determination of Turnover of the previous year of 4 crores

[Rama Krishana]

As per the Paragraph no. 3A of the Notification no. 8/2003 CE dated 1.3.2003 for the purpose of Calculation of Rs. four hundred lakhs (4 crores) of the previous year, certain amount shall be excluded. Other than excluded items, all turnover of excisable goods shall be included.

My query is related to the term "excisable goods" used in the SSI exemption notification above.

As per Section 2(d) of the Central Excise Act, 1944, (d) "excisable goods" means goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as being subject to a duty of excise and includes salt;

Now my query is whether the value / turnover of the goods where Goods are specified in the Tariff itself with empty tariff rate (e.g. Goods falling under Chapter 12 of CETA) and with Nil tariff rate (e.g. heading 53.01 of CETA) are "excisable goods" as being Subject to duty of excise.

Because if these are "excisable goods", the value shall be included in the turnover of the previous year and if these are not "excisable goods", the value shall not be included in computing the limit of 4 crores.

I have no doubt that goods exempted under a notification are "excisable goods" and are liable to be included as above.

But the doubt arises in respect of goods where tariff rate itself is empty or tariff rate itself is Nil.

AI Summary

Excisable goods: nil rate tariff entries count toward SSI turnover while blank rate entries may not under current interpretation.
Whether goods specified in the tariff with a Nil rate or a blank rate of duty are "excisable goods" for computing SSI exemption turnover turns on the meaning of "as being subject to a duty of excise" in Section 2(d), read with tariff interpretative notes and precedent. Administrative practice and appellate decisions generally treat nil rated (and, in many cases, blank rate when read with tariff notes) goods as excisable and thus includible in turnover, while some argue blank entries may indicate non excisability absent manufacture or marketability.