Commissioner of Customs Vs Blue Gold Maritech (International) Ltd (CESTAT Hyderabad)
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, in the case of Commissioner of Customs (Preventive) Vijayawada versus Blue Gold Maritech (International) Ltd, ruled on the admissibility of depreciation on capital goods imported under the Export Oriented Unit (EOU) scheme. The appeal arose from an order by the Commissioner that had allowed depreciation on capital goods from the date of installation or commencement of production until the date of duty payment, rather than until the date of de-bonding.
The respondent, Blue Gold Maritech (International) Ltd, a 100% EOU, had imported capital goods and raw materials without payment of duty between 1994 and 1997 under various customs and central excise notifications. The conditions for these exemptions included fulfilling specified export obligations and achieving minimum value addition. However, the respondent significantly failed to meet these conditions, exporting only 1.37% of the required Net Foreign Exchange (NFE). This led to a show cause notice demanding customs and central excise duties.
The case went through multiple rounds of adjudication and appeals, with the tribunal remanding the issue for fresh consideration multiple times, emphasizing the need to follow principles of natural justice and to consider relevant judgments. In the latest adjudication, the Commissioner found that the respondent had failed to meet the minimum export performance and NFE criteria. Despite this, the Commissioner allowed depreciation until the date of duty payment, leading to the department’s appeal to the CESTAT.
