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JS-TRU Letter No. 354/38/2011-TRU, Dated: 02/03/2012

Clarification regarding levy of Excise duty on branded precious metal jewellery

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Opinion

With regard to levy of Excise duty on branded precious metal jewellery classifiable under tariff heading 7113 manufactured/sold under a brand name it was clarified vide D.O.F. No. B-1/3/2011-TRU dated 25.03.2011 issued after Budget 2011-12 as under:

That if the jeweller “ABC jeweller: advertises and sells its products under brand name “Star” or put a logo like ABC i.e. in a stylized manner and also puts the same brand name or an abbreviation or mark on the jewellery or article itself or on the packing of jewellery like jewellery box or pouch or even on warranty card or certificate of quality, then such goods will be treated as branded and will be liable to duty.

Now, again the Trade and Industry have asked for clarification on the issue of levy of duty. Reference has been made to condition No. 8 of Notification No. 5/2006-CE dated 01.03.2006 which provides that “This exemption shall not be applicable to articles of jewellery of heading 7113 on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself.”.

Trade has contended that accordingly only such jewellery where brand name or trade name is indelibly affixed or embossed on the articles of jewelry itself should attract excise duty and duty should not be charged on the articles which do not themselves bear such marking but which are packed in a jewellery box or pouch bearing a trade name or brand name or in whose case, the warranty card or certificate of quality issued at the time of sale bears a trade name or brand name.

Now, Board has clarified that the said condition is relevant with regard to levy of duty on branded jewellery. It is clarified that the excise duty leviable on precious metal jeweller, manufactured or sold under a brand name (not being a house mark used by jewelers 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 certification of quality, then such goods will not be treated as branded jewellery and thus, it will not be liable to excise duty.

Clarification issued in this regard in earlier Letter No. B-1/3/2011-TRU dated 25.03.2011 modified accordingly.

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