Eligibility :
The units whose value of clearances computed in accordance of the notification does not exceed ` 400 lakh (4 crore) in the previous financial year are eligible for the benefit of the Notification No. 8/2003.
For example, if ABC Ltd. wants to claim the benefit of the notification in the year 2015-2016, then it has to see whether the clearances of the year 2014-2015has exceeded ` 4 crore. In the same example, if ABC Ltd. has started up the business only in the year 2015-2016, then it is entitled for the benefit of the said notification for the year 2015-2016 as its previous year clearances are nil (even with the fact that the company has not started the operation).
The limit will be calculated by taking into account the clearances in respect of one manufacturer from one or more factories or from a factory by one or more manufacturers. There are many issues and cases on the issue which is popularly known as clubbing of clearances. The basic idea behind this is to curtail the creation of dummy units for availing the benefit of the notification for each such unit.
Exempted units whose turnover is more than prescribed limit (called specified limit) have to file a declaration in prescribed form with Assistant Commissioner of Central Excise and should obtain a dated acknowledgement. Such declaration is filed only once in the lifetime of the assessee and not every year. The „specified limit‟ for this purpose is ` 60 lakh below exemption limit. In present provisions this limit works out to be ` 90 lakh (` 150 lakh – ` 60 lakh). Therefore, the declaration shall be filed by units whose turnover exceeds ` 90 lakh. Small units whose turnover is below the specified limit (` 90 lakh) per annum shall not file any declaration at all.
The benefit under this notification is only an option to the manufacturer, and if the manufacturer wishes to pay normal duty availing CENVAT facility, he can do so. The manufacturer has to intimate his option with the following details either to Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise marking a copy to Superintendent of Central Excise providing the following details: –
(a) Name and address of the manufacturer;
(b) Location of the factory/factories;
(c) Description of the inputs used in the manufacture;
(d) Description of goods manufactured;
(e) Date on which this option is exercised;
(f) Aggregate value of clearances of goods
Special provision in respect of textile products: In respect of textile products falling under headings 61, 62 or 63, the principal manufacturer (person on whose behalf the goods are manufactured by job-workers) is liable to pay the duty under rule 4(1A) of Central Excise Rules, 2002 and not the job worker. Therefore, such person is considered as manufacturer and is eligible for SSI exemption. Presently, only branded readymade garments are liable to excise duty.