Charging CE or ST, Central Excise

[prakash kulkarni kulkarni]

our company is in manufacturing as well as do the job work. There are 3 scenarios-

1. we purchase paper and poly, do the lamination and sell to the parties applying CE duty.

2. We receive the paper and poly form the parties,do lamination and charge only for labour. The billing is done with ST.

3. We receive only paper from parties ,using our own poly and laminate it.

The issue is with 3^rd point. This being the first case, I seek your opinion.

Sir, pls suggest me-

1. Whether this is job work are manufacturing activity?.

2. The series of the invoice, whether to keep same are keep separately?

3. Whether to charge ST or CE or to bifurcate and charge?

Thanks and regards

P R kulkarni

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

The process undertaken by you amounts to manufacture. Hence the final product is liable to central excise duty. This is for the reason that paper and laminated paper are two distinct products known to commerce. hence lamination of paper supplied by your customer with poly amounts to manufacture. Since it is a manufacturing activity you can maintain a separate series of invoices for accounting purpose. However you have to intimate your range officers about this. and get an acknowledgment from him. There is no question of payment of ST on your activity mention at 3 of your query and hence question of bifurcation does not arise.

[Naveed S]

Yes sir,regarding your 3rd point, the job work process amounts to manufacture and hence chargeable under central excise, as explained above.

Further, it is to clarify that all the process namely 1st, 2nd and 3rd process as mentioned in your above query shall amount to manufacture and shall fall under central excise and therefore no service tax angle therein. You may seek advice from the department in the matter.