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M/s Amazon Wholesale (India) Pvt, New Delhi Versus Commissioner of Central Excise, Bangalore-I

2016 (3) TMI 70 - AUTHORITY FOR ADVANCE RULINGS

Manufacture or deemed manufacture - activities treated as Manufacture or deemed manufacture - whether activity of Quality Check Stickering will not amount to manufacture under Section 2(f) ibid? - 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 .....

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applicant would not amount to manufacture or deemed manufacture under Section 2(f) of the Central Excise Act, 1944, namely; Inspection and testing, Cleaning and lint brushing, Jewellery correction, Activities relating to spectacles and frames (placing in case, tightening screws on eyewear), Folding and hanging, Tagging, Inserting freebies, Placing the product in original box / pack, Inserting warranty cards, Inserting moisture absorbing tablets, Inserting bookmark, Debundling, Sorting, Wrapping .....

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a) Private Ltd (hereinafter also referred to as the applicant) is a private limited company incorporated in India under the Companies Act, 1956 and the Companies Act, 2013. The main objects of the applicant inter alia includes; to carry on the business of wholesale trading of all kinds of goods and products including all kinds of consumer goods, commodities, durables, merchandise, articles and products either physically or online platform or through any other mode including engaging in B2B e-com .....

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n its own account or on behalf of persons, companies located in and outside India; and to engage in the business (whether as owner, manager, operator, consultant, partner, adviser, etc) of creating technology and developing software for the purpose of facilitating wholesale trading, online sale and purchase of any kinds of goods, commodities and merchandise and to carry out any and all such activities as may be related to or in connection with carrying on the trading activities. 2. The question .....

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original box / pack 9. Inserting warranty cards 10. Inserting moisture absorbing tablets 11. Inserting bookmark 12. Debundling 13. Sorting 14. Wrapping 15. Sensitive material covering 16. Bagging 17. Bundling, set creation and rubber banding 18. Stickering 19. Boxing 20. Stuffing and adding dunnage to glassware 21. Taping 22. Consignee detailing 23. Cardboard foot printing 3. Applicant is an entity incorporated for undertaking wholesale operations in India. The applicant will enter into vendor .....

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acking, wrapping, folding, inspection, cleaning and stickering on the goods purchased from the manufacturers and will subsequently sell the goods to retailers, industrial users or wholesalers. The proposed activities would be carried out at the time of inbound shipment of goods into the warehouse or on shipment of goods to the customer or on customer returns. The applicant may charge additional consideration/fees for undertaking (certain) proposed activities, the additional consideration/fees ch .....

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lter the primary packing or original labeling affixed by the manufacturer of the goods under the applicable regulations. Further, the proposed activities would not involve affixation, alternation or change in the MRP/RSP of any product/item received in the warehouse; that all items, where required, would already have an MRP/RSP affixed or pre-printed; that the activities proposed to be undertaken by the applicant is intended to protect the goods and facilitate the inventory management, storage, .....

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ufacture, except for following activities described by the applicant as under; I. ASINStickering: The ASINstickering refers to affixing a barcode on the goods when the original barcode on the products does not exist or is not readable. It provides the description about the product (such as brand, colour, size, etc.). It assists in tracking the goods warehoused. The ASINstickering is affixed on the bubble wrap, bag, box, etc, as the case may be. For instance, affixing the barcode on the calculato .....

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atch number, lot identifier, etc. The blank sticker is affixed on the goods / original box to avoid confusion as to which barcode is the actual item identifier. The blank stickering is typically not required after a packing. III. Quality Check Stickering: If goods in the applicant's warehouse are identified to be defective or not in compliance with their description, they are sidelined for inspection by the quality control team. A quality check sticker is affixed on such goods for identifica .....

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items, where required, would already have on MRP/RSP affixed or pre-printed. In view of this, activity of ASIN and Blank stickering will not amount to manufacture under Section 2 (f) of Central Excise Act, 1944. 7. Revenue submits that affixing of Quality Check Stickering may not amount to manufacturing. However if the quality checking/testing conducted on the goods is incidental or ancillary to the completion of manufactured product, then the same may amount to manufacture. 8. It is observed fr .....

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refore, activity of Quality Check Stickering will not amount to manufacture under Section 2(f) ibid. 9. Further applicant submits that for the activities, mentioned at S. No. 12 to 23 above, this Authority vide Ruling AAR/CE/04/2012 dated 24.08.2012 in case of M/s Amazon Seller Service Private Ltd., had ruled that they do not tantamount to manufacture. Since the activities mentioned at S. No. 12 to S. No. 23 above are same (which also includes ASIN and Blank Stickering as also Quality Check Stic .....

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e agrees with the applicant that said activities do not amount to manufacture except activities relating to spectacles and frames (placing in case, tightening screws on eyewear)(S.No.4) and tagging of jewellery (S.No.6), which are explained by the applicant, as under; Various activities related to spectacles and frames are undertaken in the warehouse. The illustrative list of activities performed under this category is: Placing spectacles/sunglasses frames inside cases: Cases are generally recei .....

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. 11. 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 proper lenses, the said product can be treated merely as frame and not as spectacles/sunglasses and cannot be sold to the customer. Also a differently known distinct commercial product comes into existence. Applicant relied upon Hon'ble Calcutta High Court judgment in case of Bholanath Sreemony Vs Addition .....

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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 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 ASINStickering or Blank Stic .....

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graphs of the tags submitted by the applicant on 16.11.2015, it is seen that they contain the names of 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 anybran .....

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, is attracted only on such jewellery on which the trade/brand name or any such mark or symbol or even a 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, .....

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