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2009 (7) TMI 333 - CESTAT, CHENNAI100% EOU – Depreciation on capital goods - Duty demand of Rs. 37,107/- has been confirmed against the appellants herein on clandestine removal of 20 nos. of computers which were not used in or in relation to the manufacture of final products. A penalty of Rs. 40,000/- has also been imposed. - The finding that no depreciation would be available to the appellants since the 20 nos. of computers were not used in or in relation to manufacture is based upon the fact that the Range Officer vide letter dated 25-6-1998 has clearly reported that 35 computers were in use in the appellant’s factory and 20 nos. were kept in stores. This leads to the automatic conclusion that the 20 nos. of computers were not actually put into use. – held that demand is sustainable - However, we set aside the penalty imposed upon them as we note that the Development Officer has granted permission for removal of goods subject to the condition of adherence to value-addition stipulated in their letter of permission issued by Secretariat of Industrial Approval, New Delhi and subject to observance of Customs/Central Excise formalities and value-addition has been admittedly achieved by them and non-observance of formalities was the only condition violated by them
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