2008 (2) TMI 123

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....hall be proportionate to the unfulfilled portion of the export obligation.  He has further noted that in respect of goods other than capital goods the demand shall be limited to the quantities which have been proved to be unutilized in the export production. He has held that the assessee shall be liable to pay the duty demanded along with interest for the relevant period.  The Revenue is aggrieved with this order. 2. The respondents have also challenged the order by filing cross-objections.  In the cross objections the respondents have stated that the depreciation has to be worked out on the basis of depreciated value of the goods.  The Commissioner has held in para 15 & 16 as follows: "15. I have gone through the ....

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....e to the unfulfilled export obligation. Another point to be decided is regarding allowing of depreciation. I find that since the capital goods have been manifestly used in production of export products and there is no allegation to  the contrary, allowing depreciation is a natural benefit which will follow during the debonding of the capital goods. In this case, it is true that the unit failed to achieve export obligation. It is also a fact that they had already fulfilled export obligation to certain extent. When the goods were put to use for manufacture of export goods, the goods do undergo depreciation in value and therefore one cannot refrain from allowing depreciation on the used goods. 16. As regards the penalty, as the adjudic....

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....   has not been fulfilled and as the full export obligation has not been fulfilled, the assessee is not eligible for the benefit as granted by the Commissioner.  3. Learned counsel submits that the Commissioner has analyzed the condition 3 (b) of the Notification and has also applied the ruling of the Tribunal rendered in the case of Natural Stone Exports case (2006 (198) ELT 440 (Tri-Bang).   He submits that the duty has to be demanded on the depreciated value of the goods and seeks for further modification of the impugned order.  4. We have carefully considered the submissions made by both sides. We are not agreeable with the grounds raised by the revenue.  The Commissioner has followed the ratio o....