tool cost amortisation

In my opinion, range officer is right... If the tool was the intermediete product to be used again in the manufacturing, then why a seperate amount to be charged for its manufacture? it appears frm the facts of the case the PO u have received seperately will be treated just like a sale of an intermediete product... Now if u dont pay duty at this stage then u should pay it on the final product i.e. auto component. Thus range officer's view is right...

The notification 67/95 is not an exemption notification.. It is just for the convinience of the assessee, to do away with hassles of taking, reversing and again taking the credit during diffrent phases of manufacture. neither assessee saves any duty nor Govt loses any duty. because when final product becomes dutiable all the above value additions are automatically taken care of.

The reasoning is that if the tool was to be developed and the cost of the same included the cost of each ocmponent would be higher. Therefore the amortisation of tool cost would be essential in the light of the facts in your case.