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2007 (12) TMI 92 - AT - CustomsApproached for conversion of DEEC shipping bills to DEEC-cum-Drawback shipping bill, to claim drawback - When major portion of the raw materials used has suffered duty, there is no reason to deny drawback - failure on the part of the exporter to export the goods under one scheme will automatically not deprive him of the benefit of the drawback - only obligation on the part of the exporter is that the goods have to be used & value added product has to be exported - drawback is justified
Issues:
Appeal against rejection of conversion of shipping bill from DEEC to DEEC-cum-Drawback shipping bill. Analysis: Issue 1: Conversion of Shipping Bill The appellants, manufacturers and exporters of Readymade Garments, exported goods under DEEC shipping bills instead of DEEC-cum-Drawback bills, leading to the denial of drawback benefit. The Commissioner cited Circular No. 4/2004-Cus and rejected the conversion request, stating that the denial of export promotion benefits was not the reason behind the conversion request. The appellants argued citing EXIM Policy and Customs and Central Excise Duties Drawback Rules, emphasizing their eligibility for drawback. The Tribunal found that the appellants had used duty-free imported accessories in manufacturing exported goods and procured indigenous materials paying excise duty, making them entitled to drawback benefits. The Tribunal held that the Commissioner's reliance on the Circular was misplaced, as the appellants' failure to export under one scheme should not automatically deprive them of drawback benefits. Issue 2: Entitlement to Drawback The Departmental Representative contended that the appellants might not be eligible for drawback due to potential Cenvat credit availed on inputs. However, the Tribunal noted that the appellants had not claimed Cenvat credit on indigenous materials and the value of duty-free imported items was minimal compared to the total export value. The Tribunal emphasized Para 2.56 of the EXIM Policy, supporting the conversion from one scheme to another. It highlighted that the appellants' inadvertent failure to file a drawback shipping bill should not hinder their entitlement to drawback benefits, especially when a significant portion of raw materials had incurred duty. Conclusion The Tribunal, after a thorough examination of the case, found the Commissioner's rejection of the conversion request unjustified. It directed the Commissioner to allow the conversion and assess the appellants' entitlement to drawback based on the submitted documents. The Tribunal emphasized the appellants' eligibility for drawback benefits under the Drawback Rules and the EXIM Policy, emphasizing that procedural errors should not impede justice. Consequently, the appeal was allowed with consequential relief, ensuring the appellants' right to claim drawback benefits.
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