2014 (12) TMI 154

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....lectric conductors for voltage exceeding 1000 volts and stranded wire of copper, all falling under Chapter 85 of the Central Excise Tariff. The appellant were initially a 100% EOU and had been given the letter of permission on 30th April, 2007 for manufacture of the above items for export. They, however, on 30th July, 2010 applied for opting out of 100% EOU scheme in terms of Para 6.18 of Foreign Trade Policy and while opting out they applied for the zero duty EPCG licence on 18-11-2010. The appellant were allowed by the Development Commissioner to opt out of the 100% EOU scheme and were also allowed to migrate to zero duty EPCG scheme. The appellant as 100% EOU had procured imported capital goods free of customs duty under Notification No.....

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....3 by which the above-mentioned duty demand was confirmed along with interest. However, no penalty was imposed on appellant. Against this order of the Commissioner, this appeal has been filed along with stay application. 2. Heard both the sides in respect of stay application. 3. Shri Bipin Garg, Advocate, the learned Counsel for the appellant, pleaded that when the appellant unit had achieved positive NFE and on this basis they had been allowed to debond and operate under zero duty EPCG scheme in terms of Para 6.18(d) of Foreign Trade Policy 2009-2014, no Central Excise duty would be chargeable on the indigenously procured capital goods as the appellant after debonding had been allowed to operate under zero duty EPCG licence ....

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....recovery thereof may be stayed till the disposal of the appeal. Shri Garg also pleaded that if pre-deposit is ordered, the same may be kept at 33% of the duty demand as the Tribunal vide stay order in the case of Nitin Spinners Ltd. v. CCE, Jaipur-II reported in 2013 (296) E.L.T. 116 (Tri.-Del.), in the background of identical facts and identical dispute, had asked for pre-deposit of only one-third of the duty demand. 4. Shri Sanjay Jain, the learned DR, opposed the stay application by reiterating the findings of the Commissioner and pleaded that though Notification No. 22/2003-C.E. as amended by Notification No. 24/2008-C.E. [Para 8 of the Notification] provides that no clearance or debonding of capital goods under EPCG scheme of C....

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....8-C.E., dated 11-4-2008 and by this amendment, in Para 8 of the Notification, a provision was introduced providing that no clearance on debonding of capital goods under EPCG scheme of Chapter 5 of the Foreign Trade Policy shall be allowed if the unit had not fulfilled positive NFE criteria at the time of debonding in terms of Para 6.18(d) of Foreign Trade Policy. The Notification No. 22/2003-C.E., dated 31-3-2003 as amended by Notification No. 24/2008-C.E., dated 11-4-2008 is, however, silent about the rate of duty payable on the indigenously procured capital goods by a 100% EOU at the time of debonding when at that time the units opts for migration to EPCG scheme. While on customs side, Notification No. 64/2008-Cus issued under Section 25(....