2012 (6) TMI 334 - AAR - Central Excise

Manufacture - Whether process proposed to be employed by the Applicant for refining and minting of products of precious metals namely gold, silver and platinum as per the specifications of customers amounts to manufacture or job work - Held that - It is clear that the processes undertaken by the applicant result in the emergence of goods which have their own distinct character, identity and use. The activities of the applicant, therefore, clearly meet the definition of manufacture. However premise of applicant that if an activity is undertaken on job work basis, it would be precluded from being considered as manufacturing appears to us to be unfounded. It is not as though the two are mutually exclusive. If in a given transaction, the raw material is supplied by the customer and the applicant charges only its making charges, it could well be a case of manufacture on job work basis. Hence, process amounts to manufacture for the purpose of Central Excise Act, 1944 and goods in question would be liable to duties of excise at the appropriate rate(s) as specified in the Central Excise Tariff Act, 1985.

Summary

Issues:
1. Determination of whether the process proposed by the applicant amounts to manufacture or job work under the Central Excise Law.
2. Assessment of whether the manufactured goods would be subject to the levy of Central Excise Duty.
3. Clarification on the standard and effective rate of duty applicable.
4. Determination of excise duty payable on gold/silver products manufactured with customer's brand name.

Analysis:

Issue 1:
The applicant sought a ruling on whether their refining and minting processes constitute manufacture or job work under the Central Excise Law. The activities involved refining and minting precious metals based on customer orders, starting from bullion form. The inspection report confirmed that the process resulted in the creation of new items with distinct characteristics, indicating manufacturing activity. Both the applicant and the department agreed that the process amounted to manufacture, meeting the legal definition.

Issue 2:
Following the withdrawal of questions 3 and 4 due to changes in duty rates, the ruling focused on whether the goods produced would attract Central Excise Duty. The ruling affirmed that the activities undertaken by the applicant constituted manufacture under the Central Excise Act, making the goods liable for excise duties as per the Central Excise Tariff Act and relevant notifications.

Conclusion:
The Authority for Advance Rulings concluded that the applicant's refining and minting processes amounted to manufacture under the Central Excise Act, rendering the goods subject to excise duties. The ruling clarified the liability for excise duties based on the nature of the activities carried out by the applicant.