passing of credit on sale of mould as such-reg, Central Excise

[Ramakrishnan Seshadri]

Dear Sir,

We have imported some moulds for manufacturing of parts for our supplier. We have taken cvd and sad for that imported mould. We are selling the mould to our supplier as such. He has issued us a PO giving tax structure as 10%+2%+1%. and he wants invoice as per this structure.

Now our question is if we sell the moulds as such how to raise invoice to them. Whether we have transfer sad or how to raise invoice.

Kindly clarify..

Thanks and Regards,

S.Ramakrishnan.

Posts / Replies

[Rajan Rajan]

Invoice to be raised Duty (CVD 10%+SAD 4%)= 14% instead of 10%. CESS: 2 +1% if applicable at the time of import and availed CENVAT credit, duty shall pay an amount equal to the CENVAT credit taken on the said goods as per rule 3(5A)

Text must be written on the invoice “As such clearance u/r 3(5A) CCR 2004.” along with purchase invoice details etc.,

[Rajagopalan Ranganathan]

Sir,

As per rule 2 (a) (A) (iv) of CENVAT Credit Rules, 2004,moulds and dies, jigs and fixtures are capital goods. If you remove the moulds without using the same then you have to reverse the credit of CVD and SAD taken by you are to be reversed. If the moulds are cleared after putting them to use then you have to pay duty in accordance with rule 3 (5 A) which is reproduced below: -

3 (5A) (a) If the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely:-

(i) for computers and computer peripherals:

for each quarter in the first year @ 10%

for each quarter in the second year @ 8%

for each quarter in the third year @ 5%

for each quarter in the fourth and fifth year @ 1%

(ii) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter:

Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.

(b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.