Correct valuation - Applicable duty rate

[Rajkumar Chandnani]

We imported machine in 2004, took cenvat cr of duty paid @ 16%. This machine is now sold by paying duty at WDV as per Account books at current prevailing duty rate i.e 8%. What should be currect .....valuation and .....applicable duty rate ?

[Guest]

Pl. refer Seventh proviso of Rule 3(3) CENVAT Credit Rule 2004 which says 'Provided also that if the capital goods , on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider or output service shall pay an amount equal to the CENVAT credit taken on the said capital goods reduced by 2.5% percent for each quarter of a year or part thereof from the date of taking the CENVAT credit.'

[Rama Krishana]

View express by Mr. Pradeep Khatri must be followed. Your action of payment of 8% on imported machinery on WDV is not correct.

AI Summary

CENVAT Credit Rule 3(3) Misapplied: Forum Debates Correct Duty Rate on 2004 Imported Machine's Sale and Valuation A discussion on a forum addresses the correct valuation and applicable duty rate for a machine imported in 2004, for which CENVAT credit was taken at a 16% duty rate. The machine was later sold with duty paid at 8% based on its written-down value (WDV). A respondent refers to Rule 3(3) of the CENVAT Credit Rule 2004, which requires a reduction of 2.5% per quarter from the credit taken. Another participant agrees, indicating that the 8% payment on WDV is incorrect.