TaxTMI 
TaxTMI 
We are in Engineering Manufacturing Sector. Our final products, which is Electrical Furnacs, is built uo using various rawmaterials and components. We also sells thease raw materials / components as spares from our manufacturing stores. Can we apply transaction value provision for paying duty on sale value insted of credit availed on such as such material. We need your opinion supported by case laws.
Applicability of transaction value provision for paying duty on sale value
27 Oct 2009 
2 Replies 
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Transaction value for duty on inputs removed as such risks credit reversal; comply with Cenvat Credit Rules instead.
When inputs are removed as such the Cenvat Credit Rules, 2004 require payment equal to the Cenvat credit availed on those inputs rather than permitting routine use of transaction value; using transaction value imposes detailed consignment-level recordkeeping and can trigger reversal of actual Cenvat credit where transaction value or computed duty is lower than the original credit, creating compliance difficulties. (AI Summary)
When inputs are removed as such the Cenvat Credit Rules, 2004 require payment equal to the Cenvat credit availed on those inputs rather than permitting routine use of transaction value; using transaction value imposes detailed consignment-level recordkeeping and can trigger reversal of actual Cenvat credit where transaction value or computed duty is lower than the original credit, creating compliance difficulties. (AI Summary)