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TMI Blog2015 (1) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... d and worn out machinery parts, the same become part of the machinery and they loose their separate identity. The use of these spare parts for replacing the old and worn out parts of the machinery would not increase the value of the machinery. At the time of debonding, the duty is payable on the value of the duty free raw materials and the depreciated value of the imported or indigenously procured capital goods and for this purpose, the value of the capital goods cannot be enhanced by the value of the spare parts used from time to time, even if the same have been capitalized. It is also seen that at the time of debonding, the Jurisdictional Inspector, Central Excise, after checking their records and stock, had determined the appellant s dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Jurisdictional Central Excise officer after checking their stock assessed the duty on the capital goods and inputs to be paid at the time of debonding and the total excise duty and custom duty so assessed was ₹ 6,23,79,012/-. This duty was paid and on 16/04/04. The Commissioner issued a no due certificate which was passed on to the Development Commissioner. On 20/04/04 the Development Commissioner issued a final debonding order and, as such, the appellants unit became a DTA unit. 1.2 The appellant during January 2001 to May 2001 period had used and capitalized certain spare parts totally valued at ₹ 75,75,268/-. These spares imported free of duty were used to replace the damaged and worn out parts of the machinery. The De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions, the impugned order is not correct. 4. Shri Govind Dixit, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner and emphasized that when the appellant have capitalized the spare parts, in question, there is double enrichment, as they have availed depreciation on the value of the spare parts and at the same time, they have also enjoyed the Customs duty exemption, that once the spare parts, in question, were capitalized, their value has to be added to the value of the capital goods, that the appellant had suppressed the fact of capitalization of the spare parts, in question, during January 2001 to May 2001 period, which came to the notice of the Department only in course ..... X X X X Extracts X X X X X X X X Extracts X X X X
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