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TMI Blog2012 (2) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of finished products for export, they had received indigenous capital goods and spare parts and accessories free of Central Excise duty and also some imported spare parts and accessories free of Customs duty. They were allowed to be debonded by the Development Commissioner. In terms of the provisions of Central Excise Exemption Notification No. 22/2003-C.E., dated 31-3-2003 and Customs Duty Exemption Notification No. 52/2003-Cus., dated 31-3-2003, a 100% EOU at the time of debonding was required to pay Central Excise duty on the indigenous goods and Customs duty on the duty free imported goods as per the provisions of Condition No. 8 of the Exemption Notification No. 22/2003-C.E. and Condition No. 8 of Notification No. 52/2003-Cus. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification prescribing concessional rate of duty of 3.09% in respect of the capital goods procured under EPCG Scheme, the appellant would be required to pay duty on the indigenous capital goods at the time of debonding @ 14.42% on the depreciated value. It is on this basis that differential duty of Rs. 6,61,96,227/- has been demanded along with interest. 1.2 The second dispute, though of smaller magnitude, is in respect of Central Excise duty payable at the time of debonding in respect of the spare parts and accessories, as while the appellant have paid duty on depreciated value, the Department is of the view that these are not capital goods and no depreciation would be available. On this ground differential duty of Rs. 20,73,953/- h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a provision was introduced providing that no clearance or debonding of capital goods under EPCG scheme of Chapter 5 of Foreign Trade Policy shall be allowed if the unit has not fulfilled positive NFE criteria at the time of debonding in terms of para 6.18(d) of Foreign Trade Policy, that from this amendment, it is clear that the migration to EPCG Scheme at the time of debonding has to be allowed if the unit has achieved positive NFE, that there is no dispute that the appellant unit had achieved the positive NFE, that the prevailing EPCG scheme under the policy permits the import of capital goods on payment of duty @ 3.09%, that though there is no doubt that 3.09% rate is prescribed in respect of capital goods imported under EPCG scheme, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital goods, in question, are those manufactured in India and not imported capital goods and since at the time of debonding only Central Excise duty is payable on them in terms of the provisions of Condition No. 8 of Notification No. 22/2003-C.E., the duty @ 14.42% would be chargeable even if the appellant at the time of debonding had been allowed migrate to EPCG scheme. 3. We have carefully considered the submissions from both the sides and perused the records. 4. There is no dispute in this case that the appellant, a 100% EOU, had, at the time of debonding, achieved positive NFE and were eligible for migration to EPCG Scheme in terms of the provisions of Condition No. 8 of the Notification No. 22/2003-C.E. issued under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EPCG scheme. We are of prima facie view that in absence of such an Excise Exemption Notification, the EPCG rate prescribed under Customs Notification No. 64/2008-Cus. dated 9-5-2008 cannot be treated as concessional rate of Excise duty chargeable on indigenously manufactured goods at the time of their debonding by a 100% EOU migrating to EPCG Scheme, as this is an omission on the part of the Government, which cannot be remedied by the Courts or the Tribunal. In view of this, we are of view that this is not the case for total waiver. The appellant are, therefore, directed to deposit Rs. 2,00,00,000/- (Rupees Two Crores) within a period of eight weeks from the date of this order. Compliance to be reported on 7-5-2012. On deposit of this amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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