TRU on jewellery, Dt. 29/12/2005

Excise duty on branded articles of jewellery.

I am directed to refer to Board’s circular No.B-1/1/2005-TRU dated 4th March 2005 on the above subject. The said circular clarifies the scope of levy of excise duty on branded jewellery. Board has clarified that the scope of the levy is only with respect to jewellery marketed and sold under such brand names as clearly understood in the trade. Certain illustrative case were also indicated in the circular so as allay the apprehensions of the trade, and field formations were requested to suitably brief gold dealers/manufacturers etc, so that there is no inconvenience to the trade.

2. Despite the scope of duty liability on branded jewellery being clarified in detail in Board’s circular dated 4th March 2005, complaints have been received in the Board that this circular is not being given effect to, in certain Commissionerates. Certain instances have been brought to notice where some jewellers claiming to be covered by the Board’s circular have been forced to pay excise duty, and jewellery has also reportedly been seized.

3. Board has taken a serious view of the matter. It is surprising that Commissioners are not following instructions issued by the Board. To ensure that there is no further repetition of such incidents, and to avoid harassment of the jewellery industry, it has been decided that when a Commissioner is in doubt and is not in a position to decide whether a particular jewellery is branded jewellery or not, or when a jeweller contests that the jewellery sold by him is not branded jewellery, the matter should be referred to the Board. Such references should be sent through the zonal Chief Commissioner giving full details and relevant documents indicating why the particular jewellery should be treated as branded jewellery. The Chief Commissioner should forward all such references to the Board by addressing it to Member (Central Excise) along with his comments in the matter. Till such time as the matter is decided by the Board, no precipitate action should be taken to charge excise duty on such jewellery. Obviously, no reference needs to be made to the Board where the jewellers themselves agree that they are manufacturing branded jewellery as per the circular issued by the Board. Similarly, no reference needs to be made to the Board where the Commissioner holds that the jewellery in question is not branded jewellery.The contents of this letter may be circulated to all officers under your charge for strict compliance.

Please acknowledge receipt of this letter.

F.No.354/203/2005-TRU

(Ravinder Saroop)
Director (TRU)

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