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M/s Amazon Seller Services Private Limited, Bangalore Versus The Commissioner of Central Excise, Thane-I

2016 (3) TMI 69 - AUTHORITY FOR ADVANCE RULINGS

Manufacture or deemed manufacture - activities undertaken by at the warehouse(s) prior to delivery of the goods to the merchant's customer - Tagging - Held that:- It is observed that as per the clarification dated 02.03.2012 issued by CBEC, if brand name is not affixed or embossed on the jewellery but appears on the packing, such as jewellery box or pouch or warranty card or certificate of quality, such goods will not be treated as branded jewellery and thus will not be liable to excise duty. In .....

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ant would not amount to manufacture or deemed manufacture under Section 2(f) of the Central Excise Act, 1944, namely; Inspection, testing and installing batteries, Cleaning, lint brushing and deodorizing, Touching up and re-stitching, Filing, debundling and jewellery correction, Activities related to spectacles and frames, Folding, hanging and ironing, Polishing, shinning and coating, Tagging, Freebies, Protective stickering, Placing the products in original box, Inserting warranty card, Inserti .....

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anies Act, 1956. Applicant provides an IT enabled/online platform to third party manufacturers/merchants to list and market their products; that this platform is offered on www.amazon.in for which a fee is charged to merchants for such online listing services; that for this purpose, as an additional service offering, the applicant has established a fulfillment center at the said warehouse(s) that receives, stores, packages and ship the products listed online for sale by the merchant to the custo .....

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house; that upon a merchant's customer placing a purchase order on the merchant's product through the applicant's online platform, the goods are appropriately dispatched to the customer after performing the necessary activities. The applicant has already sought the advance ruling in respect of such activities undertaken by them at the warehouse(s) prior to delivery of the goods to the merchant's customer and it was ruled that such activities do not amount to "manufacture&quo .....

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on shipment of goods to the merchant's customer or on customer returns for which the applicant may charge a separate consideration/fees; such consideration/fees would be subject to Service Tax. The proposed new activities on which the current ruling is being sought by the applicant would be undertaken at the said warehouse(s) and at other warehouses operated/to be operated by the applicant or third parties on its behalf or at a premises located outside the warehouse of the applicant wherein .....

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tem received in the warehouse. All items, where required, would already have an MRP/RSP affixed or pre-printed. That the activities proposed to be undertaken by the applicant at the inbound, outbound and customer return's stage is not different from the conventional supply chain adopted by the consumer goods industry and the overall intent is to facilitate the sale of products to the merchant's customers. No value addition is undertaken vis-à-vis the products itself. 4. Applicant .....

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g, shinning and coating 8. Tagging 9. Freebies 10. Protective stickering 11. Placing the products in original box 12. Inserting warranty card 13. Inserting moisture absorbing tablets 14. Inserting books mark 15. Replacing shoe laces 5. Revenue in response to the application replied that all the activities mentioned at S. No. 1 to S. No.15 above will not constitute manufacture, except for activities relating to spectacles and frames (placing in case, tightening screws on eyewear)(S. No. 5) and ta .....

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screws on eyewear: In case of customer returns, screws at the temples and hinges on the eyewear can become loose during storage. Such screws are tightened with the help of a screwdriver. This activity may also be carried when the items are received from Manufactures and it is noticed that the screws are loose. 6. Revenue submits that when suitable lenses are fitted in frames, only the product can be sold as spectacles/sunglasses. This activity is rendering the product marketable since without pr .....

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les by assembling of frames of the spectacles and thereafter upon prescription fitting glasses to individual frames and then selling them to the customers. Assembly of parts of the frames does not create something new and hence it cannot be termed to be manufacture to come within the meaning of Section 4(5) of that Act. In view of Hon'ble High Court judgment, we hold that the activity relating to spectacles and frames (placing in case, tightening screws on eyewear) will not amount to manufac .....

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uct and the offer price of the product would remain same as it was before the freebies being offered. The intent of the freebies is to offer incentives to customers to purchase items on the platform to promote the business of the manufacturer/ merchants and the applicant. 7. Revenue submits that if combo packs of certain products are prepared in such a way that additional labels, stickers, MRP tags are supplied on the products, then said activity shall appear to be amounting to manufacture under .....

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hat putting of free items with other products, in this case, shall not amount to manufacture under Section 2(f) ibid. Tagging: This activity involves reapplying the tags in case they have come out. The activity does not involve applying applicant's additional tag. It involves flipping the tags of items for which the tags are not visible. This method is used when ASIN Stickering or Blank Stickering is not sufficient. Ex: A shirt in polybag - with the barcode tag overturned. The activity invol .....

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brands such as "NEXT Jewellery", "Bare Monkey", "Abraxas" etc. The applicant is attaching these tags to the jewellery before dispatch. It has to be ascertained whether the said brands are registered brands and as to whether the said brands' name is already embossed on the said jewellery or otherwise. If the applicant is tagging on bare jewellery without any brand mark and if they are registered jewellery brands, then, the activity may amount to manufacture. Howe .....

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number which is cross referred with such trade/brand name (not being a house mark used by jewellers for identification of jewellery at the time of exchange/resale) is indelibly marked or embossed. If such brand name is not affixed or embossed on the jewellery or article itself but appears on the packing such as the jewellery box or pouch or even on the warranty card or certificate of quality, such goods will not be treated as branded jewellery and thus will not be liable to excise duty. The cla .....

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