High Court Upholds Tribunal's Order on Duty Dispute for Export Unit

The High Court dismissed the appeal against the Central Excise and Service Tax Appellate Tribunal's order, finding no substantial question of law raised by the tribunal's remand decision. The case involved a dispute over duty demand, including central excise and customs duties, sought under specific notifications for a registered 100% Export Oriented Unit under the Software Technology Park Scheme. Despite the assessee's compliance with duty payment at depreciated value upon de-bonding, a show cause notice challenged this practice. The tribunal's order for remand was upheld, emphasizing adherence to prescribed procedures for duty liability determination.

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Issues:
1. Appeal against the order passed by the Central Excise and Service Tax Appellate Tribunal (CESTAT) on 1st April, 2014.
2. Dispute over remand to the adjudicating authority and substantial question of law.
3. Demand of duty comprising central excise duty and customs duty.
4. Benefit sought under two notifications dated 31st March, 2003 and 13th August, 1993.
5. Assessee being a registered 100% Export Oriented Unit (EOU) under the Software Technology Park (STP) Scheme.
6. Procurement of capital goods and availing benefits of notifications.
7. Dispute over payment of duty at the stage of de-bonding at the depreciated value.
8. Tribunal's direction for remand and adherence to prescribed procedure.

Analysis:
1. The High Court heard both sides on the appeal against the CESTAT order. The Revenue contested the remand to the adjudicating authority, arguing it was a formality as the tribunal had taken a definite view, raising a substantial question of law. The tribunal dealt with an appeal by the assessee against the duty demand confirmed by the Commissioner of Central Excise and Service Tax, Pune. The demand included central excise duty and customs duty amounts. The benefit was sought under two specific notifications.

2. The factual position revealed the assessee's status as a registered 100% EOU under the STP Scheme, with infrastructural facilities for a software technology park and a bonded warehouse license under the Customs Act, 1962. The assessee procured capital goods and applied for de-bonding, agreeing to pay duties on the depreciated value. Despite paying the depreciated value duty and seeking a no-dues certificate, a show cause notice proposed recovering the entire excise duty forgone. The Revenue argued against the scheme allowing duty payment at depreciated value.

3. The tribunal, in para 5.3 of its order, referenced notifications and circulars permitting depreciation of capital goods at de-bonding, including cases of 100% EOU. However, it did not provide a final opinion, leading to a remand due to the Revenue's disagreement with its own circulars. The tribunal directed adherence to the prescribed procedure for duty liability determination. The High Court found the tribunal's order of remand not raising a substantial question for consideration, dismissing the appeal without costs.

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