Commercial production date governs depreciation and de-bonding duty demand where certification and records support the earlier commencement date.

The dispute concerned the date of commercial production for computing depreciation and sustaining a duty demand arising from de-bonding. The Development Commissioner had certified commencement on 23.03.2004, and the record showed that the unit consistently proceeded on that basis during de-bonding and payment of duty on stocks and assets. On that footing, re-fixing the commencement date to 27.11.2004 was not sustainable, so the demand based on excess depreciation could not survive and the penalty also fell.

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Issues: Whether the date of commercial production of the unit was to be treated as 23.03.2004 or 27.11.2004 for the purpose of computing depreciation and sustaining the duty demand arising from de-bonding.

Analysis: The Development Commissioner, the controlling authority of the unit, had certified that commercial production commenced on 23.03.2004. That certification was accepted in the course of the proceedings, and the record showed that the appellant had consistently acted on that basis while completing the de-bonding process and paying the applicable duty on stocks and assets. On that footing, the reassessment of the commencement date to 27.11.2004 was not sustainable, and the demand founded on excess depreciation could not survive.

Conclusion: The date of commercial production was held to be 23.03.2004, the duty demand was set aside, and the penalty could not be sustained.

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