Applicability of Rule 10A clause iii

[Dharmender Batra]

we are doing job work of customer located in HP (excise free zone). against material supplied by party app. Rs.400/- per kg we take the cenvat credit and then charge duty on full material value plus job work charges Rs.22.3 per kg. department is of view that Rule 10A clause iii is applicable to us and accordingly valuation should be as per rule 8. please guide us.

AI Summary

Debate on Rule 10A Clause iii: Job Work Valuation in Excise-Free Zones and CENVAT Credit Implications A discussion on the applicability of Rule 10A clause iii in Central Excise involves a company performing job work for a customer in an excise-free zone. The company takes CENVAT credit and charges duty on the full material value plus job work charges. The department believes Rule 10A clause iii applies, suggesting valuation should follow Rule 8. A respondent advises considering whether the goods are sold by the HP unit or used for further manufacturing, and the relationship between the job worker and the principal to resolve the issue legally.