TaxTMI 
TaxTMI 
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.
Payment of duty - Dies manufacture
30 Nov 2009 
2 Replies 
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CENVAT credit treatment determines duty liability on sale of dies; adherence to the Rule 3(3) proviso is required.
Duty on sale of jobworked dies is governed by the seventh proviso to Rule 3(3) of the CENVAT Credit Rules, 2004: that proviso prescribes the adjustment and recoupment mechanism where MODVAT/CENVAT credit was availed on metal supplied for manufacture of dies, and must be followed to determine duty liability when those dies are later sold; deviations by the assessee or department are not consistent with that rule. (AI Summary)
Duty on sale of jobworked dies is governed by the seventh proviso to Rule 3(3) of the CENVAT Credit Rules, 2004: that proviso prescribes the adjustment and recoupment mechanism where MODVAT/CENVAT credit was availed on metal supplied for manufacture of dies, and must be followed to determine duty liability when those dies are later sold; deviations by the assessee or department are not consistent with that rule. (AI Summary)