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2017 (5) TMI 443 - AT - Customs100% EOU - value of depreciation on capital goods - demand - Held that - the Circular No.49/2000-Cus. dt. 22.05.2000 is applicable to the period under dispute. In para-17 of the said circular, it is provide that depreciation upto 90% is eligible on capital goods other than computer and computer peripherals, at the time of debonding. Therefore contention of the department that N/N. 22/2003-CE and 52/2003-CE are applicable is factually and legally wrong. Non-accountal of goods - appellant has not accounted for these items taking the view that these are merely scrap - Held that - Appellant has not offered any satisfactory explanation for not accounting duty on these items except raising contention that these are scrap - demand upheld. Difference in the quantity of baby receiving blankets - appellant claims it to be inadvertent error - Held that - The Tribunal in the case of SHRI RENUGA SOFT X TOWELS Versus COMMISSIONER OF CENTRAL EXCISE, MADURAI 2008 (9) TMI 694 - CESTAT, CHENNAI has set aside the confiscation and penalties and the proceedings have attained finality. The Tribunal has found that fabrics were in semi finished conditions and were not fit for removal as final product (baby receiving blankets) - thus, the difference in quantity is only an error and the demand raised on account of difference in quantity of baby receiving blankets, also do not sustain. Appeal allowed - decided partly in favor of appellant.
Issues:
Calculation of depreciation on capital goods, Duty demand on plastic containers, Difference in quantity of finished products Calculation of Depreciation on Capital Goods: The case involved a dispute regarding the correct calculation of depreciation on capital goods by the appellant. The appellant argued that they were eligible for a higher depreciation rate based on a relevant circular, contrary to the department's contention. The Circular No.49/2000-Cus. was deemed applicable to the period under dispute, allowing for depreciation up to 90% on capital goods other than computers. The Tribunal upheld the appellant's argument, ruling that the department's reliance on specific notifications for a lower depreciation rate was factually and legally incorrect. Duty Demand on Plastic Containers: Another issue was the duty demand on plastic containers that the appellant had not accounted for during debonding, considering them as scrap with no resale value. The appellant claimed these items were written off as scrap with no depreciation value, and any duty paid would have been revenue-neutral due to the availability of cenvat credit. However, the Tribunal rejected this explanation, upholding the duty demand of &8377; 1,76,030 on the unaccounted plastic containers. Difference in Quantity of Finished Products: The discrepancy in the quantity of baby receiving blankets declared by the appellant in ER-1 returns and the list furnished to the department was also contested. The appellant explained the difference as an inadvertent error, emphasizing that it was not an attempt to evade duty. The Tribunal considered the appellant's submissions and noted that the difference was due to fabrics being in semi-finished conditions, not fit for removal as final products. Referring to a previous Tribunal decision that set aside penalties related to this issue, the Tribunal concluded that the demand based on the difference in quantity did not hold. Consequently, the impugned order was modified, setting aside all duty demands except for the duty on plastic containers and the duty on imported Picanol looms. This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's findings on each issue, ensuring a comprehensive understanding of the case.
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