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TMI Blog2008 (9) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... th annual capacity of 30 million pieces and annual export target value of Rs. 168 lacs. (b) They imported capital goods valued at Rs. 52,80,833/- duty free and imported inputs and also procured inputs from domestic tariff area duty free totally valued at Rs. 2.03 crore which included value of capital goods. The duty foregone amounted to Rs. 1,92,77,577/-. (c) The appellant commenced production in March 1990 and exported totally about six million pieces valued about Rs. 4 crores. It is claimed that they faced unprecedented competition in the international market as the value fell from about 70 US $ per thousand pieces to 20 US $ per thousand pieces. They applied for de-bonding and were granted in principle de-bonding permission by the DGFT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiming the value addition as 49.22% (as against the required value addition of 44.95%); the Development Commissioner got these details verified through the jurisdictional Superintendent and ultimately the show cause notice dated 23-8-99 issued to them was withdrawn on 31-12-2002 holding that the party has achieved the value addition. 4.2 He admits that there is partial non-fulfilment of export obligation. He submits that the capital goods imported have been duly installed and used for the intended purposes and substantial exports have been made using the said capital goods. The entire raw materials imported/procured duty free stand utilized and the entire finished goods which have been manufactured using the duty free materials stand expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Thevara v. CC & CE, 1992 (61) E.L.T. 343 (S.C.). 5.2 She reiterates the finding of the Commissioner relating to adoption of five years period for determining of value addition norms starting from 1989-90 onwards on the ground that the appellant commenced production in the month of March, 1990 i.e. few days earlier to the close of the financial year. 6.1 We have carefully considered the submissions from both sides. At the outset we observe that the 100% EOU is a scheme governed by EXIM policy with corresponding exemption Notifications under the Customs Act/Central Excise Act, It is an interlinked scheme. There are certain responsibilities and powers given to DGFT authorities like taking action for non-fulfilment of export obligation with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .4 The very same issue of not meeting value addition norms has been raised by the Customs authorities. The exemption notifications governing the 100% EOU are subject to conditions including conditions imposed under EXIM policy. The customs authorities are empowered and required to ensure that the conditions of notifications are fulfilled. When the customs authorities decide as to whether the condition on value addition norms has been fulfilled or not the decision of DGFT authorities passed in quasi-judicial proceedings cannot be overlooked or brushed aside. If the decision of the DGFT authorities in this regard was found not acceptable as per EXIM policy, it would have been appropriate on the part of the Customs authorities to take up matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw materials. If duty demand is upheld in such a situation, then it would amount to levying duty on goods not imported and not procured which is not legally sustainable. The duty demand in this regard is set aside. 7. As regards the capital goods, as already mentioned they have been put to use and sizable quantity of finished goods have also been exported. The appellant had asked for de-bonding as on 31-3-96. The de-bonding permission should be held effective from 31-3-96. To grant any depreciation beyond that date, would amount to granting extra benefit for the delay in applying for de-bonding and delay in actual payment of duty. Therefore, we hold that the appellant shall pay applicable duty on the capital goods on the written down valu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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