MFG UNIT DONE RM AS SUCH SALES WHETHER IT UNDER EXTRA DUTY 10% OF RM SALE VALUE PL CONFIRM

[nandankumar roy]

DEAR SIR,

PL CONFIRM AS A MFG UNIT SALES RM WHERE DUTY PASSED AS PER RECEIPT OF CENVAT BUT AUDIT PERSON SAYING YOU HAVE TO PAY DUTY FURTHER 10% OF RM VALUE AS BILLING TO OTHER WITHIN 5% MARGIN AND PL CONFIRM WHETHER IS UNDER RULE 6 OF CENVAT IF NOT UNDER WHICH RULE

AI Summary

Manufacturers may not owe extra 10% duty on raw materials sold as such under Rule 6 of CENVAT. A query was raised regarding whether a manufacturing unit must pay an additional 10% duty on the sale value of raw materials (RM) when sold as such, under Central Excise rules. An audit suggested this duty was necessary. The response clarified that the removal of inputs as such by manufacturers should not be equated with trading activities. If such removal is not routine, the requirement to pay an additional amount may not be sustainable under the Department's view. The discussion focuses on the applicability of Rule 6 of CENVAT or other relevant rules.