TaxTMI 
TaxTMI 
2013 (11) TMI 1213
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....under Chapter 29 of the Central Excise Tariff. They started operations as 100% EOU in March, 2007. On 25.3.2011 on their application, the Development Commissioner granted in principle approval for debonding. Final debonding was to be allowed after payment of customs duty on imported inputs and capital goods and central excise duty on indigenous inputs, capital goods and finished goods lying in stock. The duty payable was calculated by the appellant and they sent duty calculation chart to the jurisdictional central excise authorities. On the instructions of the central excise authorities, the appellant in addition to payment of duty on capital goods and inputs also paid duty of Rs.29,17,195/- on the stock of inputs lying with them as on 25.3....
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....he finished goods lying in stock at the time of in principle debonding order and that the duty would be payable in terms of the proviso to Section 3(1) of the Central Excise Act, 1944 and not under Section 3(1) ibid. The Asstt. Commissioner, therefore, held that the duty has been correctly paid by the appellant and as such, their refund claim is without any justification. 1.2 On appeal being filed to the Commissioner (Appeals), the above order of the Asstt. Commissioner was upheld vide order-in-appeal dated 18.09.2012 against which this appeal has been filed. 2. Heard both the sides. 3. Shri Devinder Sharma, Consultant, ld. Counsel for the appellant, pleaded that in this case in-principle approval for debonding had been granted by ....
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.... claim any duty exemption for procurement of capital goods or inputs, but, during this period, the unit can claim advance authorization/DEPB/duty draw back benefit by export of the goods, that in view of this, no duty was chargeable on the finished goods except for the duty of Rs.6,31,360/- payable on the inputs contained in the finished goods exported out of India, that the departments reliance on para-(a) of the Appendix 14-I-L of the Hand Book of Procedure of the Foreign Trade Policy is totally wrong, as in terms of Note-(ii) to Appendix 14-I-L, the 100% EOU would continue to be treated as EOU/EHTP/STP unit till the date of final exit order or issue of fresh LOP under the new scheme in cases of conversion from one scheme to the other an....
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....l Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals). He emphasized that in terms of para (a) of the Appendix 14-I-L of the Hand Book of Procedure of the Foreign Trade Policy 2009-2014 applicable Customs and excise duty are required to be paid on the imported and indigenous capital goods, raw materials, components, consumables, spares and finished goods in stock with 100% EOU, that when the units switched over from the 100% status to DTA status and the entire stock stood transferred to the DTA unit, the same would have to be treated as clearance to the DTA and the duty on the finished goods would be attracted, which would be payable in terms of the proviso to Section 3(1) of Central Excise ....
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....on 11.6.2011. The point of dispute is as to whether the appellant are eligible for refund claim of Rs.22,85,835/- (Rs.29,17,195/- minus Rs.6,31,360/-). In this regard according to para (a) of Appendix 14-I-L prior to final debonding, applicable customs and excise duty are required to be paid on the imported or indigenous raw materials, components, consumables, spares and finished goods in stock and that the unit is also allowed to dispose of the raw materials, components, consumables, etc against duty free licence and can also export the capital goods, raw materials/components, etc. In this case, before final debonding, there was stock of finished goods involving duty of Rs.29,17,195/- and all these finished goods had been exported out of I....