Dutiability question

Originally posted by : Amit
	Dear Experts,   An assesse XYZ is manufacturing some goods and paying duty on clearance. Is it also possible for him to buy some other goods without any brand (different goods) from SSI manufacturer ABC under exemption , then just bring goods to his factory and fix his (XYZ's) own brand and sell the goods as boughtout goods without having to charge duty as the goods have been manufactured by ABC. I understand that mere putting brand name is DOES NOT amount to manufacture. And,since SSI manufacturer ABC is not manufacturing goods in brand name belonging to another (as he is supplying finished/final product without any brand), he is also not required to pay duty. Pl. clarify this interesting matter quoting relevent noti/rules/sections if possible

XYZ  will invite troubles for himself and also for ABC, and ABC would be deemed factory of XYZ under such circumstances and would be clubbed with XYZ for manufacture of goods on brand of XYZ, refer clause 2 (v) of notification no 8/2003.  

THANK YOU VERY MUCH SHIRMASIR. SATISFIED WITH UR REPLY

Sirs,

I just went thru  section 2(f)(1). It includes any process incidental or auxialliary in the definition of manufacture. So, is this also the reason why XYZ should not do his own branding of the  bought out unbranded goods from exempted units as those goods will also become dutiable?

in simple language an assessee is entitled to 1) manufacture the dutiable or exempted goods and clear the same on payment of duty 2) trading of goods manufactured by others, without bringing the same in the manufacturing area

if above two are blended as per your version, then department will initiate that the traded goods are manufactured from your own works and you are liable to pay the duty, 

as the exempted unit can not provide you any document which is enough for excise department, XYZ will face the music of evasion prone activities in indirect taxes

I also agree with US Sharmaji.

Regards

HS Negi

Thanks again sharmasir. You have been most helpful.