EOU wins right to convert shipping bills pre-No Dues Cert into drawback bills

The Tribunal ruled in favor of the appellant, a 100% EOU, allowing the conversion of all shipping bills, including those filed before the issuance of the 'No Dues Certificate,' into draw back shipping bills. The delay in issuing the certificate by the Revenue was held not to prejudice the appellant's right to claim benefits as a DTA unit, with the certificate deemed effective from the date of application or final duty payment. This decision granted the appellant the entitlement to convert shipping bills for the entire period in question, emphasizing their right to benefits despite administrative delays.

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Issues: Conversion of free shipping bills to draw back shipping bills prior to issuance of 'No Dues Certificate'

Analysis:

1. The appellant, a 100% EOU, sought permission to exit the scheme and paid the duty on capital goods under the prevalent EPCG scheme as directed by the Development Commissioner. The appellant applied for a 'No Dues Certificate' after discharging full duty liability, which was issued on 03.12.2007, followed by the final de-bonding order on 9.1.2008.

2. The appellant filed 70 exports under free shipping bills between 26.9.2007 and 9.1.2008, seeking conversion to draw back shipping bills for exports made during this period. The adjudicating authority allowed the conversion of only 31 shipping bills filed after the 'No Dues Certificate' issuance, denying the conversion for bills filed earlier due to the absence of the certificate.

3. The main issue was whether the balance shipping bills filed before the 'No Dues Certificate' issuance could be converted into draw back shipping bills. The Tribunal noted the delay in issuing the certificate by the Revenue, which should not prejudice the appellant's right to claim the benefit as a DTA unit.

4. The Tribunal held that the 'No Dues Certificate' should relate back to the date of application or final payment of duty, as observed in previous cases. The delay in issuing the certificate, solely in the hands of the authorities, should not affect the appellant's entitlement to the benefit as a DTA unit.

5. Consequently, the Tribunal set aside the impugned order and directed the Commissioner to examine the appellant's claim for conversion of shipping bills from the date of discharging full duty liability, considering the appellant as a DTA unit from that date onwards.

6. The Tribunal emphasized that the delay in issuing the 'No Dues Certificate' should not impact the appellant's right to claim benefits, and the certificate should be considered effective from the date of application or final duty payment, ensuring the appellant's entitlement to conversion of shipping bills for the entire period in question.

7. The appeal was disposed of in favor of the appellant, granting them the right to convert all shipping bills, including those filed before the issuance of the 'No Dues Certificate,' into draw back shipping bills, considering the appellant as a DTA unit from the date of discharging full duty liability.

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