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TMI Blog2018 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... l excise duty of R.7,895/-. Commissioner of Customs Vide Order-in-Original No.5/2008 dt. 08/09/2008 has confirmed the demands raised therein and imposed a penalty of Rs. 10 lakhs on the appellants. 2.1. The appellants contended that they were manufacturing numbering machines (also called 'numbering boxes') which were used by printing industry during 1987-1995 under the notifications cited above. During the period 1997-98, they have exported goods worth Rs. 2.08 crores and after 1998 they were finding it difficult to export the numbering machines as there was no market due to changes in technology. They have become sick and have closed the unit. The Development Commissioner, Cochin Special Economic Zone, Bangalore vide Order-in- Original No.1/24/91:EOU:CEPZ dt. 26/11/2002 found that the appellants were guilty of contravening the provisions of the Foreign Trade (Development and Regulation) Act, 1992 and ordered suo moto debonding of the unit from the EOU w.e.f. 26/11/2002. 2.2. The appellants further contended that they were not liable to pay customs duty in terms of Notification No.13/81-Cus; non-fulfillment of export obligation was due to genuine financial constraints and as such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the Policy / Notification. CBECC vide Circular No.29/2003-Cus dt. 03/04/2003 has clarified that there will be no upper cap for claiming depreciation with respect to capital goods imported by EPU/STP/EHTP and depreciation can be claimed up to 100% from the ate of commencement of commercial production till the date of payment of duty. Tribunal has been consistently holding that depreciation would be available to a 100% EOU if the commercial production has been started. They relied upon the following case laws:- i. CC Vs. Maharashtra Hybrid Seeds Co. Ltd. [2008(226) ELT 575 (Tri. Bang.)] ii. Sandur Micro Circuit Ltd. Vs. CCE [2008(227) ELT 128 (Tri. Bang.] iii. Salora Floritech P. Ltd. Vs. CC [2008(88) RLT 867 (CESTATC/ Delhi)] iv. Profitex Pvt. Ltd. Vs. CC&E [2008(226) ELT 711 (Tri. Mum.)] v. Suvarna Aqua Farm & Exports Ltd. Vs. CC [2005(190) ELT 284] vi. Natural Stone Exports Ltd. Vs. CC [2006(188) ELT 440] vii. Premier Granites Ltd. Vs. CC&E [2007(210) ELT 200] viii. P. Suresh Vs. CC [2011(266) ELT 226 (Tri. Bang.)] 2.6. The appellants contented that demands are not sustainable as the goods imported and procured from local sources duty free have been used in goods ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aipur - 2006 (194) E.L.T. 117 (Tri.-Del.) to argue that in the case of debonding the duty is to be paid on the depreciated value at the rate in force at the time of payment of such Excise duty. They also referred to the CESTAT judgment in the case of CCE, Vadodara v. Solitaire Machine - 2003 (152) E.L.T. 384 (Tri.) wherein it was, inter alia, held that "A perusal of Notification No. 13/81-Cus. and the EOU provisions make it clear that duty liability upon debonding is no way connected to discharge of export obligation. It is clear from the notification that under the EOU scheme, imported goods were given exemption from duty as long as they were used for production of export goods. Thereafter, upon debonding the goods are treated as imported goods and subjected to duty as applicable to other import goods. That the original import was under an export obligation scheme makes no difference to duty liability." In this regard, it is to state that we agree with the contention of the appellants that during the relevant time when the goods were procured duty free there was no condition to achieve positive NFEE in Notifications Nos. 136/94-C.E. and 126/94- Cus. nor was there any condition req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed earlier, the appellants did not fulfil their export obligation and thereby violated the condition of the exemption Notification No. 126/94-Cus. which makes them ineligible for the said exemption notification. As a consequence the Customs duty foregone was correctly confirmed by the adjudicating authority in terms of Section 28 of the Customs Act, 1962 read with the bond executed by the appellants. 4. The learned counsel for the appellants has intervened at this juncture and submitted that the decision of the Tribunal and the Hon'ble High Court in the case of Hindustan Agrigenetics Ltd. appeared to have not placed before at the time of the judgment in the case of Hindustan Agrigenetics. However in case, the duty is held liable to be paid, due allowance for depreciation in terms of the Board's Circular needs to be granted. 5. Heard both sides. 6. The brief issue to be decided in this case is as to whether a EOU which has not fulfilled the positive NFE is liable to pay the customs duty foregone on the capital goods procured duty free under Notification No.13/81-Cust and No.123/81-CE. We find that there are two contradictory judgments by the Tribunal whereas the Delhi Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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