2019 (11) TMI 426 - AT - Central Excise

Refund claim - Deposit paid on debonding of unit - Revenue directed the appellant to pay differential duty of ₹ 83,49,549/- which was deposited by the appellant on 20 November, 2009 - Appellant claimed refund of the said amount - HELD THAT - The observations of learned Commissioner (Appeals) that calculation of duty payable on the indigenous capital goods for conversion of 100% EOU to EPCG scheme was done on self assessment basis are contrary to the fact of the case. We, therefore, hold that impugned order is not sustainable and we set aside the same and remand the matter to learned Commissioner (Appeals) to decide the matter afresh by taking into consideration copies of said two letters referred - Appeal allowed by way of remand.

Summary

Issues:
- Calculation of duty payable on indigenous capital goods for conversion of 100% EOU to EPCG scheme
- Self-assessment basis by the appellant
- Error in assessing liability at 5%
- Contradiction in the observations of the learned Commissioner (Appeals)

Analysis:
The case involved an appeal against an Order-in-Appeal passed by the Commissioner of Central Excise & Customs. The appellants, working as a 100% EOU and manufacturing cotton yarn, applied for debonding their unit to convert to the EPCG scheme. The jurisdictional authorities directed the appellants to pay a specific amount on debonding of indigenous capital goods. The appellant deposited the required amount but later was directed to pay a differential duty and interest, which they claimed was unwarranted. The claim for a refund was rejected by the Original Adjudicating Authority and upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

Upon hearing both parties and examining the records, the Tribunal noted that the self-assessment of duty payable on indigenous capital goods by the appellant was done at a concessional rate of 5%, which was incorrect as per the provisions of the CBEC Customs Manual for the EPCG Scheme. The Commissioner (Appeals) had observed that the duty calculation was done on a self-assessment basis, but the Tribunal found this observation to be contrary to the facts of the case based on the letters exchanged between the jurisdictional authorities. The Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for a fresh decision, instructing the appellant to provide copies of the relevant letters for consideration.

In conclusion, the appeal was allowed by way of remand, highlighting the importance of accurate assessment and compliance with the prescribed duty rates in the context of converting from a 100% EOU to the EPCG scheme. The judgment emphasized the need for proper documentation and adherence to the applicable provisions to avoid discrepancies in duty calculations and subsequent appeals.