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TMI Blog2003 (10) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... d Undertaking (EOU), imported plant and machinery for production of surgical/examination gloves and started production in 1989-90; that as they incurred losses due to break down of the USSR and buyer in USA defaulted in its commitment, they became a sick industrial company; that the Board for Industrial Financial Reconstruction (BIFR) recommended winding up of the assessee company; that a show cause notice dated 2-6-2000 was issued to them for demanding Customs duty and Central Excise duty on capital goods for violating the provisions of Notification No. 5/86-C.E., dated 20-1-86 and Notification No. 339/95-Cus., dated 21-11-95 and 33/94-Cus., dated 22-6-1994; that the Commissioner, under the impugned Order, has come to the finding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervising their operations. having come to a finding that the conditions of Letter of Approval had been complied with it is not open to the Commissioner of Customs to hold that there was deemed non-compliance of the Letter of Approval. He relied upon the decision in Teg's Masrado Ltd. v. CCE, Chandigarh - 2002 (139) E.L.T. 117 (T) wherein it has been held that the demand of duty on raw material and capital goods is premature when the application of the noticee for de-bonding of the unit is pending and the Development Commissioner has not arrived at definite conclusion about non-fulfilment of their export obligation. Reliance has also been placed on the decision in Vishal Footwear Ltd. v. CCE, 1999 (114) E.L.T. 60 (T). He also contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trade (Development Regulation) Act, 1992. Both notifications issued under the provisions of the Customs Act as well as the Central Excise Act provide exemption from payment of duty if the goods are for being used in connection with the production, manufacture, or packaging of articles for export out of India. The Commissioner in the impugned Order, has recorded a very specific finding that the condition stipulated in Notification No. 339/85-Cus. and Notification No. 5/86-C.E. to the effect that "the capital goods imported or procured locally without payment of duty ought to be installed and used within the zone in the manufacture of export goods" has also been complied with and "it is on record that the noticees were able to export their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Rules, 1944 for confiscation of the capital goods procured indigenously and for imposition of penalty. The capital goods in question have been used for purpose of manufacture and export of goods. Accordingly all the appeals filed by Revenue are rejected. 6. The Commissioner, under the impugned Order has confirmed the demand of duty on the depreciated value of the capital goods on the ground that these goods are deemed to have been removed form the Zone with the lapse of the Letter of Approval, relying upon the judgment in the case of Kesoram Rayon v. C.C., Calcutta, 1996 (86) E.L.T. 464 (S.C.). We observe that the Revenue itself in its appeals has mentioned that the said decision of the Apex Court does not appear t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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