Re Painting of Auto Parts - whether deemed manufacture?

[Vinay Sharma]

Dear Sir,

We undertake painting of Auto Parts. Painting of Auto Parts  is deemed manufacture as per Section XVII note No. 6 of the Central Excise Tariff .Therefore we charge excise duty on the same.

After the painted material is sent to OEM customer, some of the components come to us for re - painting from the OEM customer due to original paint on components get damaged in their factory or got some stains or marks etc.

After stripping the original paint these components are re- painted in our factory. Will it be regarded as deemed manufacture under Section XVII note no. 6 ?

With best regards

 

[YAGAY andSUN]

Yes, but you have to follow the provisions mentioned in the Rule 16 of Central Excise Rule, 2002.

[Vinay Sharma]

Dear Pradeep Ji,

Thanks for your reply.Our customer is insisting on charging of service tax instead of excise duty on this transaction.

could you plese help us by elaborating your answer.

Thanks & Regards.

 

 

AI Summary

Deemed manufacture: repainting of auto parts treated as manufacture, subject to Central Excise rules and compliance. Painting of auto parts is treated as deemed manufacture under the Central Excise tariff framework, so excise duty is chargeable on initial painting. Repainting of components returned by the OEM after stripping the original paint is also regarded as deemed manufacture, subject to compliance with the Central Excise rules governing manufacturing operations and related procedural requirements. A customer contention seeks classification as service tax rather than excise, presenting a tax characterisation issue.