2021 (11) TMI 201 - AT - Customs

Finalization of duty in respect of one shipping bill - issuance of Export Obligation Discharge Certificate (EODC) - cancellation of bond - HELD THAT - The reason why the department is not able to accept the claim of the appellant that imported goods were used for manufacture of finished products, is the non-availability of the test report. From the grounds stated in the appeal, it is seen that much effort has been taken by the appellant by issuing several representations to the authorities to trace out the lab test report. The Board in its Circular No.79/2002-Cus. dated 28.11.2002 has clarified that in such situation when the test report is not available, the duty has to be finalized on the basis of available test reports. Observing that the bond has been cancelled and returned to the appellant, nothing further survives - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Finalization of duty in respect of one shipping bill based on the availability of test reports and compliance with Export Obligation Discharge Certificate (EODC) and bond cancellation.

Analysis:
The appellant, engaged in manufacturing and exporting garments, imported cotton yarn dyed fabric and exported finished products. The consignments were allowed for export after provisional assessment, with samples sent to the Textile Committee for testing. The Deputy Commissioner of Customs finalized the assessment without lab test reports for some shipping bills. The Commissioner (Appeals) remanded the matter for reconsideration, leading to the appellant obtaining some test reports but not for all shipping bills. The appellant relied on a Board circular allowing acceptance of exporters' declaration in the absence of test reports. The original authority admitted the use of duty-free imports in 12 shipping bills but not in one. The Commissioner (Appeals) upheld this decision, prompting the appellant to file the present appeal.

In the appeal, the appellant argued that efforts to trace the missing lab test report were unsuccessful, citing a Board circular allowing acceptance of other test reports or exporters' declarations in such cases. The appellant also highlighted the issuance of an Export Obligation Discharge Certificate (EODC) and the cancellation of the bond, indicating no further duty demand. The appellant requested the appeal to be allowed based on these grounds.

The Revenue supported the findings in the impugned order, emphasizing the issuance of the EODC and the cancellation of the bond. The issue before the tribunal was the finalization of duty for one shipping bill due to the unavailability of the test report. The appellant's efforts to obtain the missing report were acknowledged, and the Board's circular was cited to support finalizing duty based on available test reports. Notably, the EODC issuance and bond cancellation indicated fulfillment of export obligations, as confirmed by the department's communication. Consequently, the tribunal set aside the impugned order, allowing the appeal with any consequential relief as per the law.

In conclusion, the tribunal ruled in favor of the appellant, considering the compliance with EODC and bond cancellation as evidence of fulfilling export obligations. The unavailability of the test report for one shipping bill did not warrant further duty demand, leading to the appeal being allowed with consequential relief, if any, as per the law.