1 Vendor is involving in selling frames. Also as per customer's specification, they are giving the service to fit the lenses in the frames as per customer's vision numbers. Fitting of lenses is being done ny other vendor and other vendor is giving the bill to 1st vendor for the same. Now my question is that whether 1st vendor is liable for Excise duty or not ?
Whether he is being covered under Excise Act or not ?
Excise duty is leviable on manufacturing. And manufacturing is a process in which a product has come into existence with new name and new usage.
Here in this case vendor is only giving service as per customer specification. Fitting of lens into frame dont satisty usage test there there is no change in use of frame .his prime business is to sell frames . so i guess excise should not be levaible . service tax comes into picture .
CAclubindia
