Method of depreciation working ....Indigenous capital goods procured without payment of duty

[deepak kalambate]

Dear Sir,

Indigenous capital goods procured by 100% EOU without payment of duty and paid duty on depreciated value at the time of debonding, what is the proper method for calculation of depreciation.

1. As per Notification No. 39/2007 CE?  or

2. As per FTP Para 6.36.3

 

AI Summary

Depreciation method for EOU capital goods: apply FTP debonding rule if no cenvat credit; otherwise treat as fresh credit event.
Depreciation on indigenous capital goods procured by a 100% EOU must be calculated under CENVAT/central excise provisions and treated as fresh where CENVAT credit was availed; if no CENVAT credit was taken, the CENVAT rules do not apply and depreciation should be determined pursuant to the Foreign Trade Policy debonding provision relied upon by the EOU.