26 May 2020


Judgments

Customs, Excise and Service Tax Appellate Tribunal

Cheema Spintex Ltd. V. Commissioner of Customs (ICD) TKD, New Delhi

MANU/CE/0292/2017

21.04.2017

Customs

Delay caused in an act required to be done by Government authority cannot be adopted as ground for penalizing innocent Appellant

In instant case, Appellant was a 100% EOU engaged in manufacture and export of cotton yarn. Appellant sought permission to opt out of EOU scheme. Development Commissioner gave approval to exit from EOU scheme on payment of duty on capital goods under prevalent EPCG scheme. Said directions of Development Commissioner were complied with by Appellant including calculation of duty liability. Duty so calculated was finally paid by Appellant. Appellant applied for 'No Dues Certificate' which was given by Deputy Commissioner, on 3rd December, 2007. After 'No Dues Certificate', final de-bonding order was issued by Development Commissioner. Thereafter, Appellant had effected 70 exports under 70 free shipping bills. As per Appellant, they were made to file free shipping bills in respect of exports made after 26th September, 2007, even though, they had fully paid requisite duty, as final de-bonding order was yet to be passed.

Appellant applied to Revenue for conversion of 70 free shipping bills into draw back shipping bills in respect of export of cotton yarn made during intervening period from 26th September, 2007 to 9th January, 2008. Adjudicating authority vide impugned order addressed issue of conversion of free shipping bills to draw back shipping bills and concluded that such conversion was possible. However, he allowed conversion of only 31 shipping bills out of total 70 shipping bills which were filed during period between issuance of 'No Dues Certificate' and issuance of de-bonding order. In respect of shipping bills filed prior to issuance of 'No Dues Certificate', he rejected such conversion on ground that inasmuch 'No Dues Certificate' was not issued by Revenue, such conversion request cannot be accepted.

Appellant completed all formalities and discharged their duty obligation on 26th September, 2007 and applied to Revenue for issuance of 'No Dues Certificate'. Said certificate could have been issued by Revenue within a period of one week, two weeks or so, in which case the benefit would have been granted to Appellant even earlier. There is no answer as to why issuance of said certificate took more than two months. Issuance of certificate is not in hands of Appellants and delay taken by Revenue for issuance of such certificate cannot act prejudice to Appellants interest. Delay caused in an act required to be done by Government authority cannot be adopted as a ground for penalizing an innocent Appellant. As such, date of issuance of 'No Dues Certificate' by Revenue cannot be adopted as a relevant date so as to decide Appellant's right to conversion of shipping bills.

Appellant having completed formality for exiting out of 100% EOU status on 26th September, 2007 itself, was entitled to benefit of DTA unit, irrespective of non-issuance of 'No Dues Certificate'. Issuance of said certificate is only an extension of event of Appellant having become a non 100% EOU. Issue of 'No Dues Certificate' would relate back to date of application filed by Assessee for issuance of said Certificate on completion of their obligation to pay the duty amount.

Tribunal in case of Hindustan Zinc Ltd. vs. CCE, Jamshedpur has observed that, acknowledgment of declaration by Assessee on a later date would relate back to date of filing of application/declaration. To similar effect is Tribunal's decision in case of Sahaj Cerchem (P) Ltd. vs. CCE, Kanpur laying down that, endorsement in change of companies name would always be effective from date of application. 'No Dues Certificate' issued by authorities would always relate back to date of application or to date of final payment of duty and delay in issuing such certificate, which is in hands of authorities and Appellant has no role to play, would not affect Appellants right to claim benefit as a DTA unit. As adjudicating authority has already extended benefit of conversion of free shipping bills into draw back shipping bills for period subsequent to issuance of 'No Dues Certificate' and there is no dispute about Appellants right to do so, It was held that, Appellant would be entitled to such benefit for previous period also. Commissioner is directed to examine Appellants claim vis-à-vis various shipping bills from date of discharging their full duty liability from which date Appellants would be considered as a DTA unit.

Relevant

Hindustan Zinc Ltd. vs. CCE, Jamshedpur [1999 (109) ELT 232 (Tri)], Sahaj Cerchem (P) Ltd. vs. CCE, Kanpur [MANU/CE/0429/1996
: 1996 (87) ELT 656 (Tri)]

Tags : Certificate Grant Delay

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