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TMI Blog2022 (10) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on CBEC Circular No. 14/2004-Cus. dated February 13, 2004 to hold that the appellant was entitled to take depreciation only for part of the quarter and not for the entire quarter. A perusal of the circular clearly shows that it was not dealing that the question as to how to treat a part of the quarter for the purpose of reckoning the depreciation. The audit team, the show cause notice, the order of the lower authority and the impugned order of the Commissioner (Appeals) have misread this circular to infer that part of the quarter cannot be taken as the complete quarter for the purpose of calculating the depreciation. Clearly such is not the case and the circular does not say so. Even otherwise, the CBEC circular is an administrative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h all goods imported by it will be exempted from Customs duty and all goods domestically procured by it from other manufacturers will be exempted from Central Excise duty. It is expected to export its products. If it is not able to export of its product, it can clear some of its products for sale within India (Domestic Tariff Area). The goods manufactured by the 100% EOU will be charged to Excise duty at a rate equivalent to the Customs Duty leviable on similar products imported from outside India as per the proviso to sub-section 1 to Section 3 of the Central Excise Act, 1944. It can also opt for debonding i.e., conversion into an ordinary unit as per the Foreign Trade Policy in which case it is required to pay Central Excise duty or, as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and proposing to impose a penalty relying on paragraph 3 of CBEC Circular No. 14/2004-Cust dated 13.02.2004. The appellant contested the demand and the Assistant Commissioner confirmed the demand and imposed penalty which was upheld by the Commissioner (Appeals) in the impugned order. Hence this appeal on the following grounds: (i) The duty demand is not sustainable in view of the explanation to paragraphs 8 of the Central Excise notification and paragraph 4 of the Customs Notification which specify that the rate of depreciation for any part of the quarter shall be computed taking into account the full quarter. Reliance was placed on the CBIC s circular by the lower authorities ignoring the explanation in the notification which is not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation for the last part of the quarter whether the appellant was allowed to avail depreciation only for the part of the quarter or for the entire quarter. Explanations to paragraph 8 of the Central Excise notification and paragraph 4 of the Customs Notification clearly state that for the purpose of computing rate of depreciation for any part of a quarter, a full such quarter shall be taken into account. The show cause notice and the impugned order relied on CBEC Circular No. 14/2004-Cus. dated February 13, 2004 to hold that the appellant was entitled to take depreciation only for part of the quarter and not for the entire quarter. This circular is re-produced below: Customs Circular No 14/2004 dated 13.2.2004 SUB:- Depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the date of payment of duty. Therefore, there is no basis for contending that depreciation would be allowed for full year or quarter year only. The depreciation is allowed in straight line method and would be allowed till the date of payment of duty. For the part years or months, depreciation would be computed proportionally. 4. Difficulty, if any, faced in implementation of the above said instruction, may please be brought to the notice of the Board at the earliest. 5. Wide publicity may please be given to the above said instruction by way of issuance of public notice. 6. Kindly acknowledge the receipt of this circular. 7. Hindi version follows. 8. A perusal of the circular clearly shows that it was not dealing that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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