Excise Duty

This query is : Resolved

Satendra (Querist)
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09 March 2010 My sister concern import some machines at free of cost by paying full custom duty and frieght charges on it. Now they want to sell to us after some modifications on it. We are only trader not manufacturer. but they want to charge excise duty from us on the value which we are supposed to sell to our customer. Kindly clarify whether they should charged excise duty on whole price or on only modification charges paid by them

SANJAY JAIN

SANJAY JAIN (Expert)
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09 March 2010 Assuming that your sister concern has not imported capital goods.
Here to examine whether modification made on the machine is sufficed to take it as manufacturing activity and in case the modification are not major one, then the treatment shall be different.

So please come out with these information to reply properly.

Satendra

Satendra (Querist)
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09 March 2010 Yes there are modification to sufficed it as manufacturing activity

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SANJAY JAIN

SANJAY JAIN (Expert)
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10 March 2010 In case there is manufacturing activity, then the valuation shall be carried out in the valuation rules in which the cost construction method shall be applied. In this rule, the cost plus 10% profit margin would construed assessable value in terms of the Rule 8.

Though duty paid on such machine, shall be available as CENVAT credit.