Liability of excise duty

[mohan rao]

we are suppling bought out items like spring nut,bolt and washers. these items excise duty liable or not. at present we are not collecting any excise duty ot the above item. if not necessary any case law or please give case law reference number. mohan rao

[Mukesh Kumar]

There are number of judgments on the issue of bought out items. Where the bought out items are independent and charged separately and not integral part of manufactured goods, the value shall not be included. On the other side, where the bought out items are integral parts of the finished goods, supplied together, charged commonly, you need to charge excise duty after including the value thereof. The important question is: what is the nature of transaction?

AI Summary

Liability of excise duty on bought out components depends on whether they are integral to the finished product. Liability of excise duty depends on whether bought out components are sold independently and charged separately, in which case their value need not be included, or whether they are integral parts supplied and charged together with the finished goods, in which case their value must be included; the decisive factor is the nature of the transaction.