2016 (11) TMI 1520 - AT - Central Excise

100% EOU - Rate of duty - indigenously procured goods under EPCG scheme - dispute is, nil rate of duty is not available for indigenously procured goods under EPCG scheme as there is no exemption under excise law to this effect - Held that - the impugned order examined the claim of the appellant for nil payment of duty on indigenous capital goods at the time of debonding. It is recorded that there is no other notification providing exemption to the capital goods in the present situation and N/N. 22/2003-C.E. is applied to determine the applicable rate of duty and depreciated value of the capital goods - In the absence of any exemption notification covering the goods, in question, we find that duty liability as calculated and confirmed by the Original Authority cannot be contested - appeal dismissed - decided against appellant.

Summary

Issues:
1. Dispute regarding nil rate of duty for indigenously procured goods under EPCG scheme.
2. Duty liability on indigenously procured capital goods upon debonding from 100% EOU scheme.
3. Applicability of Notification 22/2003-C.E. for determining duty liability.
4. Interpretation of foreign trade policy in relation to duty exemption under Central Excise Act.

Analysis:
1. The appeal challenged an order by the Commissioner of Central Excise regarding the duty liability on capital goods procured from the indigenous market by an appellant operating as a 100% EOU. The appellant obtained permission to debond from the EOU scheme and cleared the goods under the EPCG scheme at a nil rate of duty. The main issue was the availability of nil rate of duty for indigenously procured goods under the EPCG scheme, as there was no specific exemption under the excise law for such goods.

2. The appellant argued that they had discharged the duty liability at the time of exiting the EOU scheme based on a letter from the Jurisdictional Assistant Commissioner. However, the Authorized Representative contended that the duty demand was valid as it pertained to capital goods procured indigenously without payment of duty under the EOU scheme. The duty liability on such goods had to be discharged upon debonding based on the depreciated value, as per Notification 22/2003-C.E.

3. Upon reviewing the appeal records, it was noted that the appellant had procured capital goods indigenously under Notification 22/2003-C.E. without paying duty. The impugned order confirmed the duty liability on these goods at the time of debonding, as there was no specific exemption available. The absence of any exemption notification covering the goods in question led to the confirmation of the duty liability by the Original Authority.

4. The Tribunal observed that the appellant had emphasized the foreign trade policy principles in the appeal without referencing any specific exemption notification under the Central Excise Act applicable to their case. The duty liability calculation based on Notification 22/2003-C.E. and the absence of any exemption for the goods led to the dismissal of the appeal. The Tribunal found no merit in the appellant's arguments and upheld the duty liability as calculated by the Original Authority.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's reasoning in dismissing the appeal.