TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 394
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....ee, it was noticed that they have paid duty @ 3.09% on the capital goods and spares / accessories in terms of Notification No.64/2008-Cus. dated 09.05.2008. It appeared that the appellant have not discharged correct duty on the capital goods/ spares pares procured indigenously. The case of the Revenue is that there is no specific Central Excise notification which provides exemption from payment of duty when cleared to unit availing EPCG scheme. The capital goods / spares parts which were originally procured duty free in terms of Notification No.22/2003-CE dated 31.03.2003 while setting up of EOU, would have to be debonded in terms of para 8(1) of the said Notification. 2. Accordingly, the Revenue proceeded against the appellant-assessee, alleging short payment of Central Excise duty on indigenous capital goods/ spares parts/ accessories, during the course of debonding of EOU unit. Show cause notice dated 13.05.2009 was issued to the appellant-assessee to demand Central Excise duty of Rs. 7,31,57,629/-. A demand of Rs. 22,26,129/- towards customs duty was also made in respect of imported spare parts alleging the same were not includible in the EPCG benefit. The appellant-assessee c....
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....tted that the Deputy Commissioner has issued a final debonding order and without reviewing the said order no further demand can be issued by the Commissioner. Further, it is also contended that EOU being a custom bonded warehouse is considered as a place outside India. As such, there is no reason for not charging customs duty for goods cleared in DTA. 7. Regarding the appeal filed by the Revenue, the appellant -assessee submitted that the original order was passed in terms of provisions of para 8 of Notification No.22/2003-CE. The various items like fire control system, water storage tank etc. are to be considered as capital goods. The appellant-assessee relied on certain case laws in which this issue has been decided in their favour. 8. Ld. AR for the Revenue while opposing the submissions of the appellant-assessee submitted that the Commissioner erred in allowing the depreciation based on the rates, prevailing at the time of debonding. He should have followed the rates as prevailing on the date of receipt of capital goods. Further, it is also contended that certain items like fire fighting etc. cannot fall under the category of capital goods, for depreciation. The imported spar....
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....or such clearance and method of calculation of depreciation are mentioned in the said Notification. Admittedly, in the present case, the appellant-assessee are entitled for debonding as they have achieved positive NFE. Accordingly, debonding was permissible in terms of the said Notification. It is to be noted that Notification No.22/2003-CE is for providing exemption to goods brought into EOU. This Notification does not provide any exemption to the capital goods, spare parts etc. for supply under EPCG Scheme. We are in agreement with the original authority regarding absence of any exemption Notification covering the situation as explained above, to support the claim of the appellant-assessee for an exemption from Central Excise duty. 12. It should be noted that the Foreign Trade Policy is for enunciating the Policy of the Government with reference to export/import and trade promotion. Various schemes and procedures were stipulated under the Policy. The rates of duty applicable to any goods either manufactured in India, imported into or exported out of India are to be governed by specific tariff entries and notifications issued by Ministry of Finance who are incharge of tax collect....
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....agreement with such assertion. We note that the debonding has been issued based on the submissions made by the appellant and relying on the permission granted by the licensing authorities for conversion into EPCG Scheme. Letter dated 16.05.2008 is for exit of the appellant-assessee from EOU Scheme. After detailed scrutiny of the documents of the appellant-assessee and various nature of items claimed to have been converted to EPCG Scheme, the present proceedings were initiated. We find no infirmity in such proceedings. Similarly, we find no relevance in the assertion of the appellant-assessee regarding EOU bonded area to be considered as being outside India. As already noted, we are dealing with debonding on EOU unit and the rate of duty applicable on the capital goods, spare parts etc. upon such debonding and conversion to EPCG Scheme. As such, we find no merit in the appeal filed by the appellant- assessee against demand for differential duty on capital goods as confirmed by the impugned order. 15. We have considered the appeal filed by the Revenue also. The Revenue is aggrieved on the rate of depreciation allowed for calculating the value of capital goods at the time of debondin....