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2016 (9) TMI 1226 - AT - CustomsDemand of customs duty on capital goods imported - imposition of penalty - 100% EOU - tissue culture plants - capital goods originally imported duty-free for setting up of the unit. On account of failure to carry on the business, the factory had to be shut down and approach made to Development Commissioner in February 1997 for de-bonding of the unit - whether the appellant is entitled to depreciation on the capital goods on which he is required to pay customs duty now? Held that: - The CBEC circular No. 43/98 dated 26th of June 1998 issued from file No. 314/19/98 allows depreciation for the capital goods other than computers and computer peripherals up to a maximum extent of 90% with the following stipulations for the units operating under EOU scheme for capital goods cleared in DTA. From a careful reading of the notification No. 53/97 customs dated 3rd of June 1997, it is seen that the capital goods at the time of clearance will be entitled to payment of customs duty on depredated value provided that the said unit has been allowed by the Development Commissioner to clear such goods in DTA. the unit commenced its production in the year 1994. The appellant has approached the Development Commissioner for de-bonding of the unit as early as 4th of February 1997. The adjudication order passed by the Commissioner originally, demanding customs duty on capital goods was passed in the year 1999. This order was received by the appellant only in the year 2011. As per the directions of the Tribunal in the 1st round of litigation, the Commissioner was directed to pass a de-novo order. Accordingly the impugned order came to be passed. Meanwhile the appellant has chosen to pay the duty, interest and penalty in the year 2011 in terms of Commissioner's order in the original proceedings and has since de-bonded the unit. Hence it is fair to take the view that the capital goods have been allowed to be cleared in DTA and hence depreciation upto 90% will be allowable to the appellant in calculating the duty payable on the capital goods. Requirement to pay customs duty - goods auctioned by department and assessee not in possession of the goods - Held that: - The appellant's unit was registered as 100% EOU. The unit was started in 1994 and was in existence till 2011, i.e. till de-bonding of the unit. The customs duty as computed originally by the Commissioner was discharged by the appellant in 2011 and thereafter the capital goods were auctioned by the government. - appellant liable to pay the customs duty and cannot take shelter under the fact that the government has auctioned the goods. Customs duty payable on the capital goods need to be reworked after allowing 90% depreciation. Consequently the customs duty payable by the appellant will considerably come down as also the interest payable thereon - in view the facts and circumstances of the case and also the fact that the appellant could not carry on its business because of adverse turn of business circumstances, a lenient view taken and the penalty imposed is waived. Appeal disposed off - decided partly in favor of appellant.
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