Who is liable to excise

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CHAITANYA GANATRA (Querist)
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27 May 2014 Suppose there is a company X ltd. which is the owner of a brand name. Another company Y ltd. is using this brand name by paying royalty. Y ltd. is purchasing lubricating oil in container packed and labelled in name of Y ltd. with the brand name of X ltd. printed on the container from Z ltd. Y ltd. directly sells this container without any alteration. Lubricating oil is covered in Schedule III of Central Excise. So, my question is whether Y ltd. is liable to excise as it uses the brand name of another party under definition of deemed manufacture ? Y ltd. gives all the direction of packing to Z ltd. and it only sells the container and does not do any acitivity who is liable to excise y ltd or z ltd ?

Arun Kumar Singh

Arun Kumar Singh (Expert)
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16 June 2014 If process amounts to manufacture or production of goods then liability of excise duty will be arise. X will pay the duty then Y is not liable to pay excise duty. Service tax will be applicable on royalty services.