Branded Jewellery, Central Excise

[arun aggarwal]

Sir,

1) If we buy unbranded gold jewellery from a manufacturer after paying 12.5% excise duty and further Brand it , can we take cenvat of 12.5% and pay the excise duty of balance after using the cenvat at 12.5% to sell further or for export under rule 18 ? pls refer to notification no 2/2011- CE dt 01/3/2011 also

2) If I clad precious/ semi precious stones on the jewellery after paying 12.5 % excise duty, will it be an excisable/ manufacturing activity to take cenvat ?

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

Chapter 71 of CETA, 1985 stipulates as follows: -

711319	--	Of other precious metal, whether or not plated or clad with precious metal:
71131910	---	Of gold, unstudded	kg.	12.5%
71131920	---	Of gold, set with pearls	kg.	12.5%
71131930	---	Of gold, set with diamonds	kg.	12.5%
71131940	---	Of gold, set with other precious and semi- precious stones	kg.	12.5%
71131950	---	Of platinum, unstudded	kg.	12.5%
71131960	---	Parts	kg.	12.5%
71131990	---	Other	kg.	12.5%
71132000	-	Of base metal clad with precious metal	kg.	12.5%

As per Note 13 of Chapter 71 for the purposes of heading 7113 and 7114, the processes of affixing or embossing trade name or brand name on articles of jewellery or on articles of goldsmiths' or silversmiths' wares of precious metal or of metal clad with precious metal, shall amount to 'manufacture' Therefore you can credit of 12.5% duty paid by the manufacturer of unbranded gold jewellery and after branding you can use that credit for payment of duty when you sell the branded jewellery or export it under rule 18.

Similarly clading precious/ semi precious stones on the jewellery will also attract 12.5% duty under sub-heading No.71131940.

[arun aggarwal]

Thanks a lot for ur valuable advice Sir!

[MARIAPPAN GOVINDARAJAN]

The reply of Sri Renganathan, in this case, is as clear as in other cases in which he dealt each and every case with detailed analysis.