TaxTMI 
TaxTMI 
2012 (2) TMI 437
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.... of the Central Excise Tariff. For manufacture of finished products for export, they had received indigenous capital goods and spare parts and accessories free of Central Excise duty and also some imported spare parts and accessories free of Customs duty. They were allowed to be debonded by the Development Commissioner. In terms of the provisions of Central Excise Exemption Notification No. 22/2003-C.E., dated 31-3-2003 and Customs Duty Exemption Notification No. 52/2003-Cus., dated 31-3-2003, a 100% EOU at the time of debonding was required to pay Central Excise duty on the indigenous goods and Customs duty on the duty free imported goods as per the provisions of Condition No. 8 of the Exemption Notification No. 22/2003-C.E. and Condition ....
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.... is no specific Central Excise exemption Notification prescribing concessional rate of duty of 3.09% in respect of the capital goods procured under EPCG Scheme, the appellant would be required to pay duty on the indigenous capital goods at the time of debonding @ 14.42% on the depreciated value. It is on this basis that differential duty of Rs. 6,61,96,227/- has been demanded along with interest. 1.2 The second dispute, though of smaller magnitude, is in respect of Central Excise duty payable at the time of debonding in respect of the spare parts and accessories, as while the appellant have paid duty on depreciated value, the Department is of the view that these are not capital goods and no depreciation would be available. On this g....
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....d by this amendment, in para 8 of the Notification, a provision was introduced providing that no clearance or debonding of capital goods under EPCG scheme of Chapter 5 of Foreign Trade Policy shall be allowed if the unit has not fulfilled positive NFE criteria at the time of debonding in terms of para 6.18(d) of Foreign Trade Policy, that from this amendment, it is clear that the migration to EPCG Scheme at the time of debonding has to be allowed if the unit has achieved positive NFE, that there is no dispute that the appellant unit had achieved the positive NFE, that the prevailing EPCG scheme under the policy permits the import of capital goods on payment of duty @ 3.09%, that though there is no doubt that 3.09% rate is prescribed in resp....
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....er EPCG scheme cannot be applied and that since the capital goods, in question, are those manufactured in India and not imported capital goods and since at the time of debonding only Central Excise duty is payable on them in terms of the provisions of Condition No. 8 of Notification No. 22/2003-C.E., the duty @ 14.42% would be chargeable even if the appellant at the time of debonding had been allowed migrate to EPCG scheme. 3. We have carefully considered the submissions from both the sides and perused the records. 4. There is no dispute in this case that the appellant, a 100% EOU, had, at the time of debonding, achieved positive NFE and were eligible for migration to EPCG Scheme in terms of the provisions of Condition No. 8....