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Issues involved: Two appeals and two stay applications - one relating to Central Excise and the other relating to Customs arising from Order-in-Appeal No. PI/VSK/66/2010, dated 19-4-2010 passed by the Commissioner of Central Excise (Appeals), Pune-I.
Central Excise Duty Issue: The appellant, a 100% EOU, imported capital goods without payment of customs duty under Notification No. 126/94-Cus., dated 3-6-1994 and procured capital goods indigenously without payment of Central Excise duty under Notification No. 1/95, dated 4-1-1995. The original adjudicating authority demanded Customs and Excise duties on the capital goods with depreciation from the date of commercial production to the date of expiry of the letter of permission in March, 2004. The lower appellate authority held that depreciation should be allowed from the date of commercial production to the date of debonding in 2006. The appellant contested the duty computation, arguing that the rate of duty should apply as of the debonding date, not the importation/procurement date. The Tribunal agreed with the appellant, stating that duty liability should be computed at the rates prevalent on the debonding date in 2006. The Tribunal also mentioned that interest is leviable on the duty amounts from the due date till the date of payment. Penalty Issue: The appellant argued that the original authority did not provide an option to pay the reduced penalty if duty, interest, and reduced penalty were paid within 30 days of the duty demand confirmation order, as per Section 112/117 of the Customs Act, 1962. The Tribunal noted that this point was not raised before the lower authorities and directed the adjudicating authority to consider the request for reduced penalty along with recomputing the duty demand in accordance with the law. Conclusion: The Tribunal disposed of the appeals, directing that duty liability should be computed at the rates prevalent on the debonding date in 2006 for the capital goods. The Tribunal also instructed the adjudicating authority to consider the request for reduced penalty and recompute the duty demand accordingly.
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