2017 (7) TMI 700 - AT - Customs

EOU - rejection of the assessee s request for issuance of NOC by the Customs - non-filing of intent declacation in the shipping bill - Held that - the Revenue was approached by the appellants for issuance of NOC as required by the DGFT authorities. Such a request has been rejected on the ground that while filing the free shipping bills during the intermittent period, i.e., from period of intimation of appellants decision to exit EOU to the final order for exit having been given by the authorities, Shipping bills were filed without any intent declaration. As such, its stand that NOC cannot be granted to the appellants. Such a declaration is a procedural requirement and it cannot be adopted as a ground to deny substantive benefits which are otherwise available to an assessee. If the factum of availability of substantive benefits can be arrived at otherwise also, the non-adherence to a particular declaration cannot be adopted as a ground for denial of such substantive benefits. It is again a well settled issue that the delay on the part of the authorities cannot act prejudice to the assessee s interest, which cannot be denied the benefits, if otherwise available. As such, the technical objection raised by the Revenue is now warranted or justified. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of NOC request by Customs authorities due to non-filing of intent declaration in shipping bills.

Analysis:
The appellants, a registered Export Oriented Unit (EOU), decided to opt out of EOU status after a five-year period. During the transition period, they continued to export goods without claiming any export incentives. When they approached the authorities for Chapter 3 benefits of Foreign Trade Policy (FTP) for 46 shipping bills filed as free bills, the request was rejected, and a NOC from Customs was demanded. The rejection was based on the non-filing of intent declaration in the shipping bills, as required by the DGFT. The Revenue contended that the appellants could have filed the shipping bills under Export Promotion Schemes instead of free bills, as per relevant circulars and notifications. The delay in obtaining the final exit order led to the non-filing of intent declaration, which was considered a procedural lapse by the authorities.

The main contention of the appellants was that they continued to operate as an EOU until the final exit order was issued, and the exports were conducted following EOU procedures. They argued that the intent declaration was a procedural requirement and should not affect their entitlement to benefits under the FTP. Citing a Supreme Court decision, they claimed that the rejection of the NOC request based on non-filing of intent declaration was unjustified. The appellants maintained that the delay in the exit order issuance should not prejudice their entitlement to benefits available under the scheme. They argued that the rejection solely on the grounds of non-filing of intent declaration was unwarranted, as substantive benefits should not be denied due to a procedural lapse.

The Tribunal found that the rejection of the NOC request solely on the non-filing of intent declaration was unjustified. It was noted that the delay in issuing the final exit order caused the non-declaration, and such technical objections should not deprive the appellants of benefits otherwise available to them. The Tribunal held that if substantive benefits could be established through other means, the failure to adhere to a specific declaration should not be a basis for denial. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants, granting them consequential relief.

In conclusion, the Tribunal ruled in favor of the appellants, emphasizing that the technical objection raised by the Revenue regarding the non-filing of intent declaration during the transition period was not justified. The delay in obtaining the final exit order was considered a valid reason for the procedural lapse, and substantive benefits available to the appellants should not be denied on such grounds.