Payment of duty - Dies manufacture

[Rajkumar Chandnani]

We are mfg platic components. We get dies and moulds made from outside on laboue jobwork thru various local tool rooms by supplying metal req for dies. we have taken modvat cr on metal supplied to them in two years @ 50% each year. We have used these dies in production for 2/3 years and there after sold during current year by paying current tariff 8% duty. Department is asking to pay duty @ 16% ,applicable rate , when we got the dies manufactured manufactured. what is correct legal position.

[Guest]

Sir, Please refer seventh proviso of Rule 3(3)of CENVAT credit Rule,2004.

[Rama Krishana]

Your action as well as department action are not correct. The provision of rule 3(3) must be followed.

AI Summary

Dispute Over Duty Rate on Sold Dies: Manufacturer Pays 8%, Department Demands 16% Citing CENVAT Rule 3(3) Proviso. A manufacturer of plastic components outsourced the creation of dies and molds, supplying metal for the job and claiming MODVAT credit over two years. After using the dies for 2-3 years, they sold them, paying an 8% duty. However, the department insists on a 16% duty, the rate when the dies were made. One respondent suggests referring to the seventh proviso of Rule 3(3) of the CENVAT Credit Rules, 2004, while another states that both the manufacturer's and the department's actions are incorrect, emphasizing adherence to Rule 3(3).