Specific depreciation terms in an exemption notification govern de-bonding duty liability, overriding a general handbook procedure.

On de-bonding of a STPI unit, duty liability was required to be computed under the depreciation method expressly prescribed in Notification No. 52/2003-Cus., which fixed depreciation at 20% per annum. The handbook procedure relied on by the assessee did not clearly establish that it displaced the notification or showed an overriding basis for depreciation. Because the importer had taken the benefit of the notification when importing the goods, the exit liability had to be determined in accordance with its terms. The specific notification therefore governed the duty computation, and the broader handbook procedure could not override it.

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Issues: Whether, on de-bonding of a STPI unit, depreciation for duty liability was to be computed under the handbook procedure claimed by the assessee or at the rate specifically prescribed in Notification No. 52/2003-Cus. dated 31-3-2003.

Analysis: The handbook procedure did not clearly show whether the stated depreciation related to income-tax depreciation or to some other purpose. The exemption notification under which the goods had been imported specifically provided for depreciation at 20% per annum at the time of de-bonding. Since the assessee had availed the benefit of that notification, the duty liability on exit from the scheme had to be determined in accordance with its express terms, and no overriding provision was shown to displace the notification.

Conclusion: The depreciation rate fixed under the notification governed the duty computation, and the assessee's claim based on the handbook procedure was rejected.

Final Conclusion: The duty demand based on depreciation at 20% per annum on de-bonding was upheld, and the appeal failed.

Ratio Decidendi: Where an exemption notification expressly prescribes the basis of depreciation for de-bonding, that specific condition governs the duty liability and cannot be displaced by a more general procedure lacking overriding force.

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