TMI Blog2006 (7) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... way of remand. 100% EOU - procured Capital Goods by import and also by local purchase free of Customs and Central Excise duty under the EOU Scheme - failure to fulfil the export obligation - HELD THAT:- It is seen that in the present case, the appellants has discharged 76% of the export obligation. Therefore, it cannot be said that they had not put to use the Capital Goods procured free of duty. In any case, it is seen that no de-bonding order has been issued by the competent authorities. In that case, the Capital Goods are still deemed to be under bond. In these circumstances, the duty demand is premature. Therefore, the impugned order is set aside and matter remanded to the original authority to decide the matter after the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- towards Customs Duty and Rs. 6,74,132/- towards Excise Duty (Total Rs. 8,40,470/-) being the duty foregone on the imported and indigenous goods. Further, a penalty of Rs. 2,000/- was imposed. The appellants approached the Commissioner (Appeals). The Commissioner (Appeals) set aside the penalty holding that the failure of the appellants to fulfil the export obligation was not intentional. But, he confirmed the duty demand. 4. The main grievance of the appellants is that the benefit of depreciation has not been given while calculating the duty in terms of Board s instructions on the subject. The learned Advocate referred to the following Circulars of the Board providing for depreciation. 1. CBEC Circular in F.No. 35-52-85-FTT date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 11-2-2005. He imposed penalty on the unit. The Central Excise Authority proceeded against the appellants. The Commissioner, in the impugned order, held that the Capital Goods are liable for confiscation under Section 111(o) of the Customs Act and in terms of Rule 209 of the erstwhile Central Excise Rules, 1944 read with Section 38A of the Central Excise Act, 1944. He has confiscated them and imposed suitable Redemption Fine. Further, he has demanded Customs Central Excise duties on the Capital Goods procured free of duty. He imposed a penalty of Rs. 7,00,000/- under Sections 112(a) and 117 of the Customs Act and a penalty of Rs. 35,000/- under Rule 209 of the Central Excise Rules, 1944 read with Section 38A of the Central Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CC CE, Vadodara v. Solitaire Machine Tools P. Ltd. - 2003 (152) E.L.T. 384 (Tri.-Mumbai) wherein it is held that demand of duty on goods prior to de-bonding is premature and further the depreciation can be claimed up to the date of payment of duty and not till the date of application for de-bonding. 8. We have gone through the records of the case carefully. It is seen that in the present case, the appellants has discharged 76% of the export obligation. Therefore, it cannot be said that they had not put to use the Capital Goods procured free of duty. In any case, it is seen that no de-bonding order has been issued by the competent authorities. In that case, the Capital Goods are still deemed to be under bond. In these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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