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TMI Blog2017 (7) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... NFE. Accordingly, debonding was permissible in terms of the said Notification. It is to be noted that Notification No.22/2003-CE is for providing exemption to goods brought into EOU. This Notification does not provide any exemption to the capital goods, spare parts etc. for supply under EPCG Scheme. We are in agreement with the original authority regarding absence of any exemption Notification covering the situation as explained above, to support the claim of the appellant-assessee for an exemption from Central Excise duty. The rates applicable to any goods should have a clear legislative provision by way of rate in the tariff or by a supporting exemption notification - no specific exemption Notification could be cited by the appellant-assessee to claim exemption for the capital gods which are being debonded to avail EPCG Scheme. In such situation, we are not able to accept the claim of the appellant-assessee. The appellant –assessee emphasised that the demand is not tenable as there is Revenue neutral situation resulting no addition to the Government revenue. We find that the concept of Revenue neutrality cannot be considered as a bar for non confirmation of tax dues, oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re earlier operating under 100% EOU scheme. Later they have applied for opting out of the scheme. The Jurisdictional Development Commissioner, Noida allowed the appellant-assessee to opt out of EOU scheme and to operate under EPCG scheme in terms of para 6.18 of Foreign Trade Policy. In the EPCG licence, list of textile and power plant machinery alongwith spare parts and their accessories were given. During the course of verification of records of the appellant-assessee, it was noticed that they have paid duty @ 3.09% on the capital goods and spares / accessories in terms of Notification No.64/2008-Cus. dated 09.05.2008. It appeared that the appellant have not discharged correct duty on the capital goods/ spares pares procured indigenously. The case of the Revenue is that there is no specific Central Excise notification which provides exemption from payment of duty when cleared to unit availing EPCG scheme. The capital goods / spares parts which were originally procured duty free in terms of Notification No.22/2003-CE dated 31.03.2003 while setting up of EOU, would have to be debonded in terms of para 8(1) of the said Notification. 2. Accordingly, the Revenue proceeded against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital goods in accordance with provision of Foreign Trade Policy. It necessarily follows, that the said debonding shall be made on payment of 3% duty only. 5. Even if the excise duty is to be paid @ 14.42% at the time of debonding, the appellant-assessee would have been eligible for taking credit of the same. Effectively, no revenue will accrue to the department. In case of such revenue neutrality the demand shall not survive. It is further contended that Notification No. 22/2003-CE is a self contained code for EOUs. Para 8 therein gives the procedure for debonding. Since the appellant-assessee fall clearly under the provisions of the said Notification, the extra duty liability as demanded by the lower authority is not sustainable. 6. Ld. Counsel also submitted that the Deputy Commissioner has issued a final debonding order and without reviewing the said order no further demand can be issued by the Commissioner. Further, it is also contended that EOU being a custom bonded warehouse is considered as a place outside India. As such, there is no reason for not charging customs duty for goods cleared in DTA. 7. Regarding the appeal filed by the Revenue, the appellant assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of EOU and para 8 of the said Notification read with the above mentioned provisions of the Policy will make them entitled to pay concessional rate of customs duty on such capital goods and the Central Excise duty of 14.42% is not applicable to them. On careful examination of the legal provisions, we find that the claim of the appellant-assessee is not supported by any exemption Notification issued by the Ministry of Finance. Para 8 of the said Notification stipulates that no such clearance or debonding of capital goods under EPCG Scheme of Chapter 5 of Foreign Trade Policy shall be allowed if the user industry has not fulfilled the positive NFE criteria at the time of clearance or debonding in terms of para 6.18 (d) of the Foreign Trade Policy. Thereafter, the procedure for such clearance and method of calculation of depreciation are mentioned in the said Notification. Admittedly, in the present case, the appellant-assessee are entitled for debonding as they have achieved positive NFE. Accordingly, debonding was permissible in terms of the said Notification. It is to be noted that Notification No.22/2003-CE is for providing exemption to goods brought into EOU. This Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pleaded for non payment of tax itself. Even the availability of credit itself is subject to various conditions in terms of Cenvat Credit Rules, 2004. The availability of such credit cannot be presumed in order to contest the duty liability of the appellant-assessee, which is in terms of applicable provisions of the Act and the Notification thereunder. We have perused case laws relied upon by the appellant-assessee. No general law has been laid down in these decisions to support the case of the appellant-assessee. The decisions are on the facts applicable to the said case. 14. The appellant-assessee also raised the point regarding final order being issued by the Deputy Commissioner and the present demand being not tenable in the absence of review of such final order. We are not in agreement with such assertion. We note that the debonding has been issued based on the submissions made by the appellant and relying on the permission granted by the licensing authorities for conversion into EPCG Scheme. Letter dated 16.05.2008 is for exit of the appellant-assessee from EOU Scheme. After detailed scrutiny of the documents of the appellant-assessee and various nature of items claimed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand for differential duty on this account. We are in agreement with the reasons recorded by the impugned order. 17. Regarding, the spare parts and accessories procured from domestic sources and also imported, we find the original authority has recorded categorical reasons for extending the benefit to these items. The application dated 14.04.2008 filed by the appellant-assessee for EPCG authorisation gave details of various spares imported as well as procured locally. On analysis of the authorisation as well as nature of items as recorded in the impugned order, we are in agreement with the findings of the original authority regarding the eligibility of these items under EPCG Scheme. In the present appeal, the Revenue could not bring out any substantial issue either in fact or in law to interfere with the finding of the original authority. 18. The Revenue also raised the point regarding non imposition of penalty under Rule 25 by the original authority. We have perused the impugned order on this aspect also. It is clearly recorded that the appellant-assessee have not breached any of the provisions of Rule 25 of Central Excise Rules, 2004 as they have not removed the exci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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