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TMI Blog2018 (3) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... ly with prescribed export obligation. Briefly, the facts are that the appellant had, admittedly, not fulfilled its export obligation mandated under the 100% export-oriented unit scheme and was proceeded against for recovery of duties foregone at the time of import from abroad and on procurement from the domestic market both of which are available under the scheme in the Export Import Policy (as it then was) when they had, in 1992, obtained a Letter of Permission. The scheme itself has undergone substantial alterations ever since its inception and, insofar as the present dispute is concerned, ever since the appellant opted for it. By the time the proceedings were initiated against the appellant, the Foreign Trade (Development & Regulation) A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the appellant by the former. The Letter of Permission contained all the obligations and privileges that devolved on the applicant. The case against the appellant is that the condition of fulfillment of export obligation in the Letter of Permission having been breached, as evidenced in the proceedings initiated and completed by the Development Commissioner, the consequence of duty liability specified in the said Letter of Permission would arise. 5. It must be noted here that the operationalizing of the scheme, insofar as exemption from duties are concerned, depended on the notifications issued under Customs Act, 1962 and Central Excise Act, 1944. A proceeding for recovery of duties cannot be based on authority other than these notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had, in the meanwhile, sought to exit from the scheme which had not been allowed till the date of adjudication. Had the exit been permitted, the appellant would have been entitled to depreciation as prescribed in the circulars referred to supra. A perusal of the Letter of Permission does not disclose the export obligation to be of such magnitude as has been asserted by the adjudicating authority. In fact, the unit was expected to export its entire production and with an addition of value to the inputs as prescribed. There is no allegation that this prescription has been defied. There is also no allegation of any misrepresentation of the exports already claimed to have been effected. Thus the shortfall is negligible. The impugned order and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability on imported, or indigenously procured, capital goods is erased by sheer efflux of time. The appellant has been a functioning export-oriented unit since 1992 and capital goods procured in that year should be eligible for depreciation over the period that the unit has been in existence. As on the date of the impugned order, the appellant has been in existence for over a decade and, by application of the straight-line depreciation approved by the Central Board of Excise & Customs, the value of capital goods would be nil. Consequently, no duty liability would arise. 10. The Letter of Permission is seen to have been issued for a period of 10 years. Appellant has not sought any renewal thereafter. The unit should have been appropriatel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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