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2014 (2) TMI 346 - AT - CustomsDemand of duty - Duty drawback - Debonding and conversion into an EPCG Unit - Date of conversion - Held that - while in principle approval for conversation of the Appellant unit from 100% EOU to EPCG Unit had been granted by the Development Commissioner s office on 07.01.08 the Appellant paid all the dues i.e. Custom Duty Central Excise Duty of imported/indigenously procured capital goods and imported/ indigenously procured raw-material spares etc. on 06.06.08 and this was reported to the Assistant Commissioner on 09.06.08 who issued No Objection Certificate (NOC) regarding clearance of all the dues on 29.07.08. Thereafter the final debonding letter permitting debonding w.e.f. 06.06.08 was issued by the Development Commissioner on 19.03.09. Thus in terms of letter dt. 19.03.09 of the Development Commissioner with effect from 06.06.08 the Appellant unit would have to be treated as EPCG unit as against their earlier status of 100% EOU. Commissioner s findings are only with regard to the issue of conversion of the Free shipping bills into Drawback shipping bills and as such the Appellant s plea for permitting drawback at all industry rate on the basis of free shipping bills filed by them by waiving the requirement of filing declaration under proviso to Rule 12(1)(a) of the Drawback Rules 1995 has not been considered. Even when originally the export of the goods eligible for Drawback at All Industry Rate has been make under Free shipping bills wherein no declaration as prescribed in Rule 12(1)(a) of the Drawback Rules is required to be filed the para 3.1 of the above circular clearly states that the Commissioner may grant exemption from observance of any of the provisions of Rule 12(1)(a) of the Drawback Rules for the purpose of allowing Drawback which includes permitting Drawback against the Free shipping bills and that no provision exists for permitting conversion of Free shipping bills in to Drawback shipping bills. The order is set aside and the matter is remanded to the Commissioner for considering the Appellant s request for waiver from the requirement of filing the declaration under Rule 12(1) (a) Drawback Rules 1995 for the purpose of drawback at All Industry Rate. If the exemption from filing the prescribed declaration under Rule 12(1)(a) is granted by the Commissioner in terms of proviso this sub-rule the Drawback claim shall be considered on merits by the concerned Officers - Decided in favour of assessee.
Issues Involved:
1. Conversion from 100% EOU to EPCG Unit. 2. Payment of Duties and Issuance of 'No Dues Certificate'. 3. Export under Free Shipping Bills and Drawback Claims. 4. Request for Conversion of Free Shipping Bills into Drawback Shipping Bills. 5. Waiver of Declaration Requirement under Rule 12(1)(a) of Drawback Rules. Detailed Analysis: 1. Conversion from 100% EOU to EPCG Unit: The Appellant, a 100% Export Oriented Unit (EOU) since 1989, sought to convert to an Export Promotion Capital Goods (EPCG) unit. They applied for debonding and received in-principle approval from the Development Commissioner on 07.01.08. The final debonding order was issued on 19.03.09, effective from 06.06.08. 2. Payment of Duties and Issuance of 'No Dues Certificate': The Appellant paid a total duty of Rs. 3,71,90,337/- on 06.06.08 and requested a 'No Dues Certificate' on 09.06.08. The certificate was issued on 29.07.08. The delay in issuing the certificate led to exports being made under Free Shipping Bills instead of Drawback Shipping Bills during the period from 06.06.08 to 28.07.08. 3. Export under Free Shipping Bills and Drawback Claims: Due to the delay in issuing the 'No Dues Certificate', the Appellant could not export under the Drawback scheme and had to use Free Shipping Bills. They later requested the Commissioner of Customs to either convert these Free Shipping Bills into Drawback Shipping Bills or allow drawback based on Free Shipping Bills by granting exemption under Rule 12(1)(a) of the Drawback Rules. 4. Request for Conversion of Free Shipping Bills into Drawback Shipping Bills: The Commissioner rejected the request for conversion on 23.10.12. The Appellant argued that the delay in issuing the 'No Dues Certificate' was beyond their control and cited Board Circulars No. 4/2004-Cus and No. 36/2010-Cus, which allow for drawback on Free Shipping Bills by waiving the declaration requirement under Rule 12(1)(a). 5. Waiver of Declaration Requirement under Rule 12(1)(a) of Drawback Rules: The Tribunal noted that the Commissioner had not considered the Appellant's request for waiver under Rule 12(1)(a) properly. The relevant Board Circulars clarify that the Commissioner may grant exemption from the declaration requirement for allowing drawback on Free Shipping Bills. The Tribunal found that the Commissioner only addressed the conversion issue and not the waiver request, which was crucial for the Appellant's case. Conclusion: The Tribunal set aside the impugned order and remanded the matter to the Commissioner to consider the Appellant's request for waiver from the declaration requirement under Rule 12(1)(a) of the Drawback Rules. If the waiver is granted, the Drawback claim should be examined on merits by the concerned officers. The appeal was disposed of accordingly.
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