TMI Blog2014 (1) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation should be granted in terms of Board’s Circular No. 43/98-Cus., dated 26-6-1998. Appellant is liable to pay duty only on the depreciated value of the capital goods - both the Development Commissioner and the Joint DGFT have permitted the appellant to clear the capital goods under EPCG scheme. Therefore, the rate of duty that can be charged on the goods being debonded would be the rate applicable to the capital goods under EPCG scheme at the time of debonding - no duty liability would accrue in regard to raw materials, consumables etc. imported/indigenously procured which have been consumed for the production of cut flowers, as the goods have been used for the intended purpose - Matter remanded back for duty computation - Decided in favour of assessee. - C/994/2009-Mum - Final Order No. A/161/2012-WZB/C-I(CSTB) - Dated:- 3-2-2012 - Shri Ashok Jindal and P.R. Chandrasekharan, JJ. Shri Vishal Agarwal, Advocate, for the Appellant. Shri Y.K. Agarwal, Addl. Commissioner (AR), for the Respondent. ORDER This appeal is directed against the Order-in-Original No. 06/CEX/2009-10, dated 7-7-2009 passed by the Commissioner of Central Excise, Pune III. 2. The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Commissioner, SEEPZ vide a letter dated 2-11-2006 informed that the Development Commissioner, SEEPZ, had agreed in principle to allow debonding of the unit. The appellant vide letter dated 9-2-2007 requested the Development Commissioner for grant of permission to debond against an EPCG licence and the Assistant Development Commissioner vide letter dated 25-2-2007 informed the appellant that the office of the Development Commissioner had no objection for issuance of EPCG licence by the Joint DGFT. The appellant applied to the Joint DGFT for EPCG licence. The Joint DGFT issued the EPCG licence vide letter dated 19-6-2007 and have fixed the export obligation to US$ 21272.07 within a period of eight years. The appellant, in the meanwhile, requested the department to allow debonding of the unit on payment of appropriate duties on the depreciated value of the capital goods. The department did not agree to the same and issued a show-cause notice dated 11-12-2008 demanding Customs duty of Rs. 1,14,35,737/- on the imported goods and Central Excise duty of Rs. 1,45,816/- on the indigenously procured goods by computing the duty in terms of para 1(3)(d)(II) of Notification No. 52/2003-Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged by the appellant. This computation of the duty demand is incorrect. (c) They have obtained in principle approval from the Development Commissioner for debonding the unit and have also obtained a EPCG licence from the Joint DGFT for clearance of the capital goods under the EPCG Scheme and in principle approval has been granted by the Development Commissioner. That being the position the rate of duty applicable would be the rate of duty under EPCG scheme and the duty liability has to be worked out on the depreciated value. 3.1 The appellant relied on a number of decisions in support of the above contentions namely, C.C. C.E., Vadodara v. Solitaire Machine Tools Pvt. Ltd. - 2003 (152) E.L.T. 384 (T.-Mum.), Khabros Steel (I) Ltd. v. CCE - 2002 (141) E.L.T. 257 (T.-Del.), Business Process Technologies (I) Pvt. Ltd. v. C.C. - 2010 (249) E.L.T. 248 (T.-Bang.) and Indo Pacific Poly-Fibres Pvt. Ltd. decision of this Tribunal vide Order Nos. A/20-21/2012/CSTB/C-I, dated 17-1-2012 [2012 (280) E.L.T. 97 (Tri.-Mum.)]. In the light of the above decisions, they submit that they are eligible for the payment of duty on the depreciated value and at the rate applicable to the EPCG sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), or the exemption available to the imported goods under any Export Promotion scheme other than the Export Promotion Capital Goods scheme permitting import of capital goods at the rate of duty of 15% ad valorem in terms of notifications in force at the time of debonding. Explanation. - The depreciation in respect of goods covered by clause (a) shall be allowed for the period from the date of commencement of commercial production of the unit or where such goods have been imported after such commencement from the date such goods have come into use for commercial production, upto the date of payment of duty. 6.1 From the perusal of the above, it is clear that where the goods were permitted to be taken outside by the Development Commissioner on debonding, the duty has to be charged on the depreciated value inasmuch as the goods have been imported under Notification No. 126/94. In case of non-fulfilment of export obligation and in case where debonding were permitted by the Development Commissioner, the duty liability has to be computed on the depreciated value as is clear from the above Notification. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procured indigenously prior to the date of issue of these notifications) and (duty liability will have to be determined) under the provisions of Notifications under which the goods were imported/procured indigenously and wherever the units were allowed to be debonded, depreciation should be granted in terms of Board s Circular No. 43/98-Cus., dated 26-6-1998. 7. Therefore, in the instant case also we hold that the appellant is liable to pay duty only on the depreciated value of the capital goods. 8. As regards the rate of duty that should be applied, it is on record that both the Development Commissioner and the Joint DGFT have permitted the appellant to clear the capital goods under EPCG scheme. Therefore, the rate of duty that can be charged on the goods being debonded would be the rate applicable to the capital goods under EPCG scheme at the time of debonding. 9. As regards raw materials, consumables etc. imported/indigenously procured which have been consumed for the production of cut flowers, no duty liability would accrue as the goods have been used for the intended purpose. 10. In view of the above position, we set aside the impugned order and remand the case back to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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