Is excise duty payable or not

 

A manufacturer has both tool and component divisions in the same premises.  Orders for manufacture of both die and components is received from foreign and local customers.  Dies made and sold on payment of VAT but retained at the premises for manufacture of components.  Amortization done.  Is Excise duty is payable on dies or not.  What is the implication on foreign and local customers.
Kindly enlighten me Sir,
 
Replies (2)

If you develop any dies in your factory premises, its comes under manufacture according to definition given under Section 2(f) of Central Excise Act. So the product dies is an excisable Porduct. However, you can claim exemption from excise duty under Notification No. 67/95 CE dated 16.3.95 since there is no physical removal of such dies from your factory and instead, the same are retained and used within the factory for manufacture of other excisable goods on which duty is payable. To transfer the ownership, you may raise excise invoice on your customer with Excise duty NIL 'quoting Notn 67/95 CE dated 16.3.95 - No physical removal, retained and used within the factory for captive consumption in the manufacture of excisable goods'. However, you have to amortise the total value of the dies over the components manufactured by you and you have to add the proportionate dies cost in each component to arrive at the Transaction value for the components cleared to your customer and pay duty on the compoents accordingly. This procedure has been approved by Hon'ble CESTAT in various cases

which case

 

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