Wether manufacture or not
This query is : Resolved
22 August 2013
An assessee is engaged in cutting of polyethene bags in to diffrent sizes & printing of clients name on it will the process amount to manufacture as per CEA 1944
24 August 2013
MEANING OF "MANUFACTURE" UNDER EXCISE
The taxable event for Central Excise duty to be attracted is manufacture or production in India of excisable goods. Section 2(f) of the Act defines the term "manufacture" in an inclusive manner so as to include any process:
(i) Incidental or ancillary to the completion of a manufactured product; and
(ii) Which is specified in relation to any goods in the Section or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture; and
(iii) Which in relation to goods specified in the Third Schedule to the Central Excise Tariff Act, 1985, involves packing or repacking of such goods in a unit, container or labelling or re-labelling of containers or declaration or alteration of retail sale price or any other treatment to render the product marketable to consumer.
(The clauses (ii) and (iii) above are termed as ‘deemed manufacture’.) The aforesaid definition gives a wider content to the expression "manufacture" as several processes which would not ordinarily be understood as amounting to manufacture are specifically included therein. However, the most commonly used test for ascertaining "manufacture" for the purpose of attracting Central Excise duty has taken place was evolved by the Supreme Court in the case of Delhi Cloth and General Mills 1977 (1) ELT (J 199). In terms of this decision, the activity or process in order to amount to "manufacture" must lead to emergence of a new commercial product, different from the one with which the process started. In other words, it must be an article with different name, character or use. Thus, a process which simply changes the form or size of the same article or substance would
not ordinarily amount to manufacture and no excise duty would be payable unless it is deemed to be manufacture as follows:
In a particular case by a section or Chapter note of the Tariff; or
In relation to goods, which are specified under MRP based assessment under section 4A, packing or repacking of such goods, labelling or re-labelling of containers including declaration or alteration of retail sales price shall amount to manufacture.
The taxable event for Central Excise duty to be attracted is manufacture or production in India of excisable goods. Section 2(f) of the Act defines the term "manufacture" in an inclusive manner so as to include any process:
(i) Incidental or ancillary to the completion of a manufactured product; and
(ii) Which is specified in relation to any goods in the Section or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture; and
(iii) Which in relation to goods specified in the Third Schedule to the Central Excise Tariff Act, 1985, involves packing or repacking of such goods in a unit, container or labelling or re-labelling of containers or declaration or alteration of retail sale price or any other treatment to render the product marketable to consumer.
(The clauses (ii) and (iii) above are termed as ‘deemed manufacture’.) The aforesaid definition gives a wider content to the expression "manufacture" as several processes which would not ordinarily be understood as amounting to manufacture are specifically included therein. However, the most commonly used test for ascertaining "manufacture" for the purpose of attracting Central Excise duty has taken place was evolved by the Supreme Court in the case of Delhi Cloth and General Mills 1977 (1) ELT (J 199). In terms of this decision, the activity or process in order to amount to "manufacture" must lead to emergence of a new commercial product, different from the one with which the process started. In other words, it must be an article with different name, character or use. Thus, a process which simply changes the form or size of the same article or substance would
not ordinarily amount to manufacture and no excise duty would be payable unless it is deemed to be manufacture as follows:
In a particular case by a section or Chapter note of the Tariff; or
In relation to goods, which are specified under MRP based assessment under section 4A, packing or repacking of such goods, labelling or re-labelling of containers including declaration or alteration of retail sales price shall amount to manufacture.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS on Purchase of Immovable Property by NRI from NRI
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Capital gain from sale of house property
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- LC charges in relation to Asset purchased should be Capitalised ?
- FORM 26A APPLICABILITY
- Regarding TDS Applicability For Director Remuneration
- Copyright software
- SFT Cash Deposit in Current Account
- Value of property in capital gain
- Opting our of sec 44AD
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
