2013 (10) TMI 1101 - AT - Customs

Duty Drawback Benefit of 100% EOU - conversion of free shipping bills into duty draw back shipping bills - Whether the period when the appellant discharged its duty liability on 4.3.08 and when the NOC was issued on 18.3.08 would confer the status of 100% EOU on the appellant or not Held that - NOC is issued based upon the fact of discharge of entire duty liability by a 100% EOU - if the appellant would not have discharged the entire duty on 4.3.08, the Revenue officer would not have issued No Objection Certificate - the issuance of NOC which is only a procedural formality would relate back to the date of payment of duty liability by the assessee - it can be fairly concluded that when the appellant discharged its duty liability as a 100% EOU on 4.3.08, it become disentitled to claim any benefit of 100% EOU - Conversely the benefit which are available to the DTA unit would become available to the assessee - assessee was entitled to file shipping bills under the drawback claim. The appellant was not claiming any benefits as 100% EOU, having discharged its entire duty liability on 4.3.08, but the fact that all procedural requirement of stuffing containers etc. in the appellants factory under the supervision of Customs authorities was being followed as is clear from the recording made by the Commissioner - the fact that exported goods were in accordance with the declaration, cannot be doubted order set aside - conversion of free shipping bills into duty draw back shipping bills allowed Decided in favour of Appellant.

Summary

Issues:
1. Dispute regarding the status of the appellant as a 100% EOU or a DTA unit during a specific period.
2. Permission for conversion of free shipping bills into draw back shipping bills denied by the Commissioner.

Analysis:

Issue 1:
The appellant, a 100% EOU unit, applied for debonding and paid duty liabilities on 4.3.08. They received a No Objection Certificate (NOC) on 18.3.08, and the final debonding order was issued on 31.3.08. The Commissioner denied permission to convert free shipping bills into draw back bills, claiming the appellant was still under the EOU scheme until 31.3.08. The Foreign Trade Policy mandates specific procedures for debonding, including obtaining a NOC before final debonding. The issuance of NOC is based on discharging duty liability, indicating the change in status from EOU to DTA. Consequently, the appellant was entitled to file shipping bills under the drawback claim.

Issue 2:
The Commissioner objected to converting free shipping bills into draw back bills due to lack of valuation of exported goods. However, the appellant followed all procedural requirements, including supervision by Customs authorities during container stuffing. Despite filing free shipping bills, the goods exported were in accordance with the declaration. Therefore, the conversion of free shipping bills into duty draw back bills was permitted, and the appeal was allowed with consequential relief to the appellants.

In conclusion, the Tribunal set aside the Commissioner's order and allowed the conversion of free shipping bills into duty draw back shipping bills, recognizing the appellant's status change from a 100% EOU to a DTA unit upon discharging duty liabilities.