Excise duty on branded components

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Manish Doneria (Querist)

19 November 2009 We are SSI manufacturers diesel engines. Some of our components are bought from SSI vendors on our specific order with our brand name either embossed or casted.

Excise people are demanding excise duty from our vendors because they are using another person brand name.

This is triggered by some Supreme court judgment on brand name issue.

My question to you is whether our vendors need to pay excise duty or not ?

Thanking you in advance.

ANIL JANGID

ANIL JANGID (Expert)

19 November 2009 Excise people are demanding excise duty from your vendors because they are using another person brand name.therefor ssi exemption not applicable hence your vendors need to pay excise duty.

Manish Doneria

Manish Doneria (Querist)

28 November 2009 With thanks Your attention is invited to no. F no.354/124/2008 dated 01 Sept 2008, wherein the Govt. Of India, Min. of Fin., Department of Revenue,Tax Research Unit has clarified the exemption from excise duty to goods manufactured by small scale units.

The letter states exemption to goods bearing brand name of another person provided that such" goods cleared as original equipment, goods bearing the brand name or trade name of KVIC, or if such goods are manufactured in a factory which is situated in a rural area."

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

01 December 2009 The brand name restriction is not applicable to SSI manufacturing component parts of equipments for another as set out in para (4) (a) of the exemption.
If the vendor is based in a rural area then also the exclusion is in effect as per para 4(c). Please examine the same.

Manish Doneria

Manish Doneria (Querist)

01 December 2009 Thank You Mr.Hiregange and Jangid.

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