2015 (1) TMI 1031

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....They were earlier a 100% EOU and had commenced commercial production on 25/03/97. They had imported capital goods free of customs duty and had also procured from domestic sources the indigenously manufactured capital goods free of Central Excise duty. Besides the capital goods, they had also imported free of custom duty the spare parts from time to time. On 01/04/04 on their application for debonding, the Development Commissioner gave in-principal approval for debonding. Thereafter the Jurisdictional Central Excise officer after checking their stock assessed the duty on the capital goods and inputs to be paid at the time of debonding and the total excise duty and custom duty so assessed was Rs. 6,23,79,012/-. This duty was paid and on 16/04....

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....the spare parts were not physically available at the time of debonding, as the same has been used up during the period from January 2001 to May 2001, that by replacing the old and worn out parts of the machinery by the new spare parts, the value of the machinery does not increase, that since the spare parts, in question, were not in stock when the in-principle approval for debonding had been granted, no duty can be demanded on the same and that in view of the above submissions, the impugned order is not correct. 4. Shri Govind Dixit, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner and emphasized that when the appellant have capitalized the spare parts, in question, ther....