29 September 2012
M/s A co . pvt. ltd.,is an importer of footwear. Now it wishes to enter into the domestic trade. It is planning to purchase footwears from the local small time manufacturers for further sales in local market. It will repack the footwear and put its brand name on the footwear. I have some specific queries 1. If it pays excise duty on purchses to the manufacturers, then is it compulsary to get the excise registration for ACo. Pvt. Ltd? 2. Can it purchase the footwear from the small time manufacture who are not registered with excise i.e.without paying excise and further pay total excise duty on its own name? If yes under which section or notification? 3. Does it make difference if it provides raw materials to the manufacturere on job work basis. Best Regards
10 October 2012
Footwear falls under Chapter 64 and there are no chapter notes deeming repacking as manufacture. Therefore this transaction is merely trading and they need not pay ED on the same.
The activity of manufacture is important therefore the RMS cannot be considered to be the manufacturer unless the agreement is to manufacture for and on behalf of the entity. Many case laws in this regard may be perused for clarity..
10 October 2012
Thanks for the reply. But will it not fall under deemed manufacturing u/s 4A? i.e Process which in relation to the goods specified in the 3rd Schedule of Central Excise Act, 1944, involves (i) Packing or Repacking of such goods in a unit container or: (ii) Labeling or relabeling of container including declaration or alternation of retail sales price on it or: (iii) Adoption of any other treatment on the goods to render the product marketable to the consumer
11 October 2012
your products(chapter 64) will not fall under the deemed manufacturing. packing or repacking or labeling or relabeling under chapter 64 does not amounts to manufacture.
05 May 2013
REETA JI, AS PER MY OPINION YOU ARE CORRECT THAT FOOTWEAR WILL FALL UNDER THE DEEMED MANUFACTURING ACTIVITIES; AS FOOTWEAR IS MENTIONED AT SL. NO. 56 OF THIRD SCHEDULE OF C.E.ACT, 1944.
FURTHER, AS PER SECTION 2(F)(III):- "manufacture" includes any process,— *which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer], and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account]. Rajeev Kumar Garg (M.Com, L.L.B.) Consultant (Excise, Customs & Service Tax) Ph. no. +91 7500802402
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