SC decides determinant for excise duty exemption

Last updated: 27 March 2008

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Manufacturers of shampoo, hair dye, lip smoothers and such other products sold in pouches get excise exemption if the weight of each pouch is less than 10 gm, though the whole carton containing the pouches may weigh more, according to the Supreme Court. In its judgment, Commissioner of Central Excise vs Kraftech Products Inc, a number of cosmetic firms had challenged the demand of duty and imposition of penalty on them for not paying the levy fully, claiming exemption under Rule 34 of the Standards of Weights & Measures (Packaged Commodities) Rules. The Excise Appellate Tribunals in Mumbai and Delhi had accepted the contention of the manufacturers. The Commissioner appealed arguing that the exemption was not available where several units are packaged together. Dismissing the appeals, the Supreme Court said: “When a lip smoother or a shampoo is packed in a carton keeping in view the quantity contained therein, the same cannot be said to be for retail sale. No person would ordinarily purchase for one’s own use 72 lip smoothers or 500 pieces of shampoo. Thus, it is not a case where the goods are being sold in multi-piece package. Each sachet must be sold as a unit.”

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CA. Amit Daga

Finance Controller, CA. CS. CFA. CIFRS. M.COM.

Hi Guys The great pleasure in life is doing what people say you cannot do I am Amit Daga 31 yrs old basically from Kolkata but Working at Hong Kong as Business Controller. I am1stattempt Professionally Qualified Chartered Accountant (CA.), Company Secretary (CS.), Chartered Financial Analyst (CFA.), Master in Bus ... Read more

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