Captive consumption exemption ends when obsolete moulds and dies are cleared for consideration; duty applies on transaction value.

Moulds and dies manufactured in-house were eligible for captive consumption exemption only while used within the factory for manufacture of goods. Once they became obsolete and were cleared to a customer for consideration, the clearance was treated as home consumption and duty became payable on transaction value. The exemption under Notification No. 67/1995 did not extend to such post-use clearance, and the cited precedent was distinguished on facts. Duty was therefore upheld on the clearance of the moulds and dies after captive use.

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Issues: Whether moulds and dies manufactured within the factory and used captively were exempt from duty at the time they were later cleared to the customer after becoming obsolete.

Analysis: The moulds and dies were eligible for the captive consumption benefit under Notification No. 67/1995 only while they remained within the factory and were used in the manufacture of goods. Once they became obsolete and were cleared out of the factory for consideration, the clearance amounted to home consumption and attracted duty on transaction value. The exemption did not extend to such subsequent clearance, and the cited precedent was found distinguishable on facts.

Conclusion: The clearance of the moulds and dies after captive use was dutiable and the exemption was not available; the finding was against the assessee and in favour of the Revenue.

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