TMI Blog2014 (2) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Development Commissioner with request for issue of final debonding order. The final debonding order was issued by the office of Development Commissioner on 19.03.09 and in terms of this order, the Appellant unit was allowed to de-bond w.e.f. 06.06.08. In other words, in terms of the letter dt. 19.03.09 of the Assistant Development Commissioner, the Appellant unit got converted into EPCG unit from its earlier status of a 100% EOU with effect from 06.06.08. 1.3 As mentioned above, while according to the Appellant, they had paid the entire duty on 06.06.08 and intimated to the Assistant Commissioner on 09.06.08 with request to issue No Dues Certificate ; the No Dues Certificate was issued only on 29.07.08. During the intervening period from 06.06.08 to 28.07.08 there were some exports made by the Appellant. Since during that period the Appellants status was still that of 100% EOU, they were not allowed to export their finished products under Drawback scheme and accordingly export were made under Free Shipping Bills. If, however, No Dues Certificate had been given on 06.06.08, during intervening period from the date of issue of No Dues Certificate by the Customs and the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned counsels for the Appellant, pleaded that the Appellant after being granted in principle approval for debonding vide letter dt.07.01.08, paid on 06.06.08, the entire duty on the capital goods, spares, inputs/raw-material in stock and in process and on inputs contained in finished goods in stock and had intimated about this payment to the Assistant Commissioner on 09.06.08 with request to issue a No Due Certificate w.e.f. 06.06.08, that No Dues Certificate was issued only on 29.07.08 and on the same date, the certificate was forwarded to the Development Commissioner, that final debonding letter was issued by the Development Commissioner on 19.03.09, that in terms of final debonding letter of 19.03.09, the debonding was w.e.f. 06.06.08 and as such w.e.f. 06.06.08 the Appellant could not be treated as a 100% EOU, that since during the intervening period from 06.06.08 to 28.07.08, when inspite of payment of duty having been paid by the Appellant, No Due Certificate had not been issued , the Appellant were not allowed to export the finished goods under the drawback claim, as a result of which those exports had to be made under free shipping bills, that since subsequently, debon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by waiving the requirement of declaration under Proviso of Rule 12(1)(a), ignoring the clarifications given in the above mentioned Circulars of the Board, is not correct. He also cited the judgment of Tribunal in case of Ginni International Ltd. Vs. CC(ICD) vide final order no C/A/57241/ 2013.CU[DB] dt. 24.07.13 where in the background of the identical facts, the Tribunal allowed the conversion of free shipping bill into Drawback shipping bills with consequential relief and pleaded that this judgment of the Tribunal is squarely applicable to the facts of this case. He also pleaded that once office of the Development Commissioner has allowed the debonding with effect from 06.06.08, the Appellant unit has to be treated as converted into EPCG unit with effect from this date only and Commissioner cannot treat the Appellant unit as 100% EOU during period w.e.f.06.06.08 even if according to the Department, full duty had not been discharged on or before 06.06.08 and some duty was paid subsequently. He, emphasized that according to the Appellant, the entire duty had been paid on 06.06.08 and payment was intimated to the Department on 09.06.08 and, there was no communication from the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, their conversion from Free Shipping Bills into DEPB Shipping Bill would not be permissible under section 149 of the Customs Act, 1962, that Hon ble Delhi High Court in case of Terra Films Pvt. Ltd. Vs. CC reported in 2011(268) ELT-443(Del.) has held that conversion of DEPB/DEEC shipping bills into DEEC/DEPB cum Drawback shipping bills is not permissible when the request had been made after lapse of long period, that ratio of these judgments is squarely applicable to the present case, that since in this case the present market value of the goods had not been declared in the shipping bills, their conversion into Drawback shipping bills has been correctly dis-allowed and that in view of this, there is no infirmity in the impugned order. 5. I have considered the submissions from both the sides and perused the records. The un-disputed facts are 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, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m advance license/DEPB/duty drawback benefit, was not applicable, and accordingly, the Appellant could not export under Drawback claim. The Appellant, however, under their letter dt.14.08.08 to the Commissioner have requested for conversion of these shipping bills into Drawback shipping bills or permitting drawback on the basis of free shipping bills by granting exemption from the provision of filing declaration for the purpose of drawback under the Proviso to Rule 12(1)(a) of the Drawback Rules, as due to non issuance of No Dues Certificate by the Department in time i.e. on 06.06.08, they were forced to export under free shipping bills during period from 06.06.08 to 28.07.08. In this regard para 3 of the letter dt. 14.08.08 is reproduced below:- it is most respectfully prayed that we may be allowed to convert the Shipping Bills show in the Annexure to Drawback Shipping bills or exempt from provision of Clause(a) of Rule 12 of the Central Excise Duties and Service Tax Drawback Rules, 1995. In support of our said request we submit as under:- In this letter the Appellant also submitted that export under 21 free shipping bills during 06.06.08 to 28.07.08 are eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laration to be made by the exporter at the time of export of goods for the purpose of availing drawback. Proviso to Rule 12(1)(a) of ibid rules empowers the Commissioner to grant exemption from observance of the provisions of Rule 12(1)(a) for the purpose of availment of drawback. This necessarily implies that whereas the Commissioner may grant exemption from observing any of the provisions of Rule 12(1)(a) of ibid rules for the purpose of allowing drawback which includes permitting drawback against a free shipping bill, no provision exists for permitting conversion of free shipping bill in to Drawback shipping bills. In view of above, it is clarified that there is no need for allowing conversion. However, in terms of the proviso to Rule 12(1)(a) of the Customs and Central Excise Duties Drawback Rules, 1995, the Commissioner may examine and consider individual requests on merits and facts in terms of the aforesaid provisions. The aforesaid relaxation shall only apply in respect of drawback claims pertaining to All Industry Rates of drawback and it would not apply to brand rate of duty drawback, where rate is claimed in terms of Rule 6 or Rule 7 of the Customs Central Excise D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een cleared for export, the ARE-1 value has to be treated as the PMV for the purpose of drawback. However, the Commissioner, instead, has only considered the conversion Free shipping bills into Drawback shipping bills, which was not required. In view of this, the impugned order is not sustainable and the matter has to be remanded back to the Commissioner for considering the Appellants request for waiver from the requirement of filing declaration in terms of proviso to Rule 12(1)(a) of the Drawback Rules. If the Commissioner after examining their request, grants the necessary waiver, the Drawback claim would be examined on merits by the concerned Custom Officers. 9. The judgment of the Tribunal in case of Actavis Pharma Manufacturing Pvt. Ltd. (Supra)and Terra Films Pvt. Ltd. (Supra)cited by the learned DR, being in respect of conversion of free shipping bills into DEPB/DEEC shipping bills are not applicable to the facts of this cases where the issue involved is totally different whether the Appellant could claim drawback at All Industry Rate in respect of exports made under free shipping bills and whether in this regard the Commissioner should have considered the Appellant s req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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