V. Padmanabhan ORDER
Archana Wadhwa, Member (J)
1. As per facts on record, the appellant was a 100% EOU engaged in the manufacture and export of cotton yarn. The appellant vide their letter dated 20.7.06 addressed to the Development Commissioner NOIDA SEZ sought permission to opt out of EOU scheme. Vide his letter dated 26.7.2007, the Development Commissioner gave approval to exit from EOU scheme on payment of duty on capital goods under the prevalent EPCG scheme. The said directions of the Development Commissioner were complied with by the appellant including the calculation of duty liability. The duty so calculated was finally paid by the appellant on 26.9.2007.
2. After the payment of full duty liability on 26.9.07, the appellant applied for 'No Dues Certificate' which was given by the Deputy Commissioner, Central Excise Division, Derabassi on 03.12.2007. After the 'No Dues Certificate', the final de-bonding order was issued by the Development Commissioner vide his order dated 9.1.2008.
3. During the period 26.9.2007, when the appellant discharged its full duty liability and till 9.1.2008, when the final de-bonding order was issued by the Development Commissioner, the appellant had effected 70 exports under 70 free shipping bills. As per the appellant, they were made to file the free shipping bills in respect of exports made after 26.9.2007, even though they had fully paid the requisite duty, as the final de-bonding order was yet to be passed.
4. Thereafter, the appellant vide their letter dated 12.8.2008 applied to the Revenue for conversion of 70 free shipping bills into draw back shipping bills in respect of export of cotton yarn made during the intervening period from 26.9.2007 to 9.1.2008. The adjudicating authority vide his impugned order addressed the issue of conversion of free shipping bills to draw back shipping bills and concluded that such conversion was possible. However, he allowed the conversion of only 31 shipping bills out of total 70 shipping bills which were filed during the period between the issuance of 'No Dues Certificate' and the issuance of de-bonding order. In respect of the shipping bills filed prior to the issuance of 'No Dues Certificate', he rejected such conversion on the ground that inasmuch 'No Dues Certificate' was not issued by the Revenue, such conversion request cannot be accepted.
The said order is impugned before us.
5. After hearing both the sides duly represented by Shri Vikrant Kackria, learned advocate appearing for the appellant and Shri R.K. Mishra, learned DR appearing for the Revenue, we find that the short issue required to be decided is as to whether the balance shipping bills filed prior to the issuance of 'No Dues Certificate' can be converted into draw back shipping bills or not. Admittedly, the appellant applied for exit out of 100% EOU scheme on 27.7.2006 and the approval of the same was granted by the Development Commissioner on 26.7.2007. Thereafter, the appellant calculated the foregone duties and paid the entire demand of duty on 26.9.2007 and applied for 'No Dues Certificate'. Revenue took almost a period of more than 2 months for issuing the said certificate which was ultimately issued only on 3.12.2007. The Commissioner has granted the benefit in respect of all the shipping bills filed after 3.12.2007 i.e. date of issue of 'No Dues Certificate' till the date of debonding i.e. 9.1.2008, but denied such conversion in respect of shipping bills filed prior to 31.12.2007.
6. The question which arises is as to what is the sanctity of the 'No Dues Certificate' which is required to be issued by the Department. The appellant completed all the formalities and discharged their duty obligation on 26.9.2007 and applied to the Revenue for issuance of 'No Dues Certificate'. The said certificate could have been issued by the Revenue within a period of one week, two weeks or so, in which case the benefit would have been granted to the appellant even earlier. There is no answer as to why issuance of said certificate took more than two months. The issuance of certificate is not in the hands of the appellants and the delay taken by the Revenue for issuance of such certificate cannot act prejudice to the appellants interest. This is well settled principle of law that the delay caused in an act required to be done by the Government authority cannot be adopted as a ground for penalizing an innocent appellant. As such, the date of issuance of 'No Dues Certificate' by the Revenue cannot be adopted as a relevant date so as to decide the appellant's right to conversion of shipping bills.
7. In any case, the appellant having completed formality for exiting out of 100% EOU status on 26.9.2007 itself, was entitled to the benefit of DTA unit, irrespective of non-issuance of the 'No Dues Certificate'. The issuance of said certificate is only an extension of the event of the appellant having became a non 100% EOU. As soon as they have discharged their discharged certificate from EOU scheme, they became entitled to the benefit of DTA unit for claim of draw back irrespective of time taken by the Revenue for issuance of the certificate. Presuming to the contrary that even after the completion of formalities, the authorities would have taken another two months for issuance of certificate, can it be said that the benefit would have arisen to the appellant after a period of those two months.
Otherwise also we are of the view that the issue of 'No Dues Certificate' would relate back to the date of application filed by the assessee for issuance of said Certificate on completion of their obligation to pay the duty amount. Tribunal in the case of Hindustan Zinc Ltd. vs. CCE, Jamshedpur [1999 (109) ELT 232 (Tri)] has observed that acknowledgment of declaration by the assessee on a later date would relate back to the date of filing of application/declaration. To the similar effect is Tribunal's decision in the case of Sahaj Cerchem (P) Ltd. vs. CCE, Kanpur [MANU/CE/0429/1996 : 1996 (87) ELT 656 (Tri)] laying down that endorsement in the change of companies name would always be effective from the date of application. As such, we are of the view that 'No Dues Certificate' issued by the authorities would always relate back to the date of application or to the date of final payment of duty and the delay in issuing such certificate, which is in the hands of authorities and the appellant has no role to play, would not effect the appellants right to claim the benefit as a DTA unit. As the adjudicating authority has already extended benefit of conversion of free shipping bills into draw back shipping bills for the period subsequent to issuance of 'No Dues Certificate' and there is no dispute about the appellants right to do so, we hold that he would be entitled to such benefit for the previous period also. We accordingly, set aside the impugned order and direct the Commissioner to examine the appellants claim vis--vis various shipping bills from the date of discharging their full duty liability from which date the appellants would be considered as a DTA unit.
8. The appeal is disposed of in the above manner.
(pronounced in the open court on 21.04.2017.)
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