Charging addl duty by a manufacturer

As per Rule 3(5) of CENVAT Credit Rules, 2004, at the time of as such removal of input, a manufacturer is required to reverse the CENVAT credit availed in respect of such inputs. Such reversal is undertaken under the cover of excise invoice wherein the duty amounts are also shown separately. Basis such invoice, the buyer of such inputs can avail CENVAT credit. There is no need for the manufacturer to obtain dealers registration for undertaking such transaction.

The imported inputs can be removed as such on reversla of the duty credit availed. Tghis would include the additional duty of cusotms ( CVD) and Special additional duty (SAD). Under 3(5) both can be shown and receiver can avail credit if eleigible. Need not be registered as importer.

Chargoing 12.5% + 4% on the selling price of the input is not correct. There is a need to reverse the actual duty. However Tribunals have held that when the duty has been paid on higher amount and accepted as duty then the credit cannot be denied. ( this stand maybe disputed) 

However if the item being traded is not an INPUT then registration as importer is necessary to pass on the credit.