Duty payable at the time of de-bebonding of capital goods

[Guest]

In STPI scheme and as per foreign trade policy value of capital goods after 5 years become NIL and in such case when we opt for de-bonding of capital goods we need not to pay any custom / excise duty. However Exicse Dept in Mumbai insist on paying duty on scrap valu. Pleas let us know whether practice following by excise dept is correct and which notification they are following to recover such duty.

[Surender Gupta]

You refer to amended notifications no. 52/2003 Cus and 22/2003 CE where capital goods allowed to cleared on depreciated value where NFE has been achieved.

Or as adjusted depreciated value where NFE has not been achieved.

AI Summary

Duty on de-bonding of capital goods may be assessed on depreciated or adjusted depreciated value despite nil book value. The reply states that duty on de-bonding of capital goods is to be assessed on a depreciated value when net foreign exchange criteria are met, and on an adjusted depreciated value when they are not, rather than automatically accepting a nil book value under the trade policy.