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2023 (6) TMI 142 - AT - Central ExciseDate of debonding of the EOU - depreciation on account of capital goods should have been allowed only up to the date of cancelation of warehousing license that is 31.12.2002 and not thereafter, or not - HELD THAT - Revenue has filed this appeal relating upon para 5.4 without taking into account the observations made in earlier para 5.1 it is quite clear that the unit was working as and EOU which beyond 31.12.2002 and has achieved NFE thereafter. As unit continue to work as EOU a warehousing license would have been extended thereafter also accordingly we do not find any merits in the appeal were by demand is to be made by determining depreciation up till 31.12.2002. It is also noted that the exemption notification also do not require the determination of duty on the date of expiry of warehousing license but it is till the date of payment of duty that is for Commissioner has held. There are no merits in the appeal filed by the Revenue which is dismissed.
Issues:
The issues involved in this case include the determination of Customs duty on imported raw materials, semi-finished containers, and H.R. coils at a customs bonded warehouse, as well as the calculation of Central Excise duty and penalties under the Customs Act, 1962 and the Central Excise Act, 1944. Customs Duty on Imported Raw Materials, Containers, and Coils: The appeal filed by Revenue was directed against an Order-in-Original, resulting in the imposition of Customs duty on imported raw materials, semi-finished containers, and H.R. coils. The Tribunal ordered M/s. Trans Freight Containers Ltd to pay the specified Customs duty as per relevant notifications and Customs Manual provisions. Additionally, the duty amount previously paid by the company was to be appropriated against the newly ordered duty. The Tribunal also confirmed nil Central Excise duty and allowed a refund for a specific amount paid earlier. Discrepancies in Duty Calculation: The Revenue raised concerns regarding discrepancies in the calculation of Customs duty by the Adjudicating authority. The grounds included the duty calculation based on the duty rate prevailing in a later year instead of the date of expiry of the warehousing license as per the Show Cause Notice. The Adjudicating authority was criticized for not providing findings on the expiry date of the warehousing license and for errors in determining duty amounts on various goods based on incorrect rates and valuations. Depreciation on Capital Goods and Excisability of Semi-Finished Containers: The issue of depreciation on capital goods was raised, emphasizing that duty should have been calculated based on the value at the expiry of the warehousing license rather than allowing depreciation beyond that date. Moreover, concerns were expressed regarding the treatment of semi-finished containers as excisable goods without proper findings, leading to errors in duty determination. Tribunal's Observations and Directions: The Tribunal highlighted the fulfillment of export obligations by the appellant and the positive net foreign exchange earnings during specific periods. It emphasized that duty demands on certain goods were unsustainable and directed the Commissioner to re-quantify duty amounts based on the raw materials and consumables in stock at the expiry of the warehousing license. The Tribunal also emphasized the allowance of depreciation on capital goods and rejected the imposition of penalties due to the absence of deliberate intent to evade duty. Final Decision and Dismissal of Appeal: The Tribunal dismissed the Revenue's appeal, noting that the unit continued to operate as an EOU beyond the expiry of the warehousing license and achieved positive NFE. It was emphasized that the exemption notification did not require duty determination at the expiry of the license but rather at the payment date, as held by the Commissioner. Consequently, the appeal was found to lack merit and was dismissed. Separate Judgment by the Tribunal: The Tribunal issued a separate judgment dismissing the Revenue's appeal due to the ongoing EOU operations and the lack of merit in demanding duty based on the expiry date of the warehousing license. (Order pronounced in the open court)
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