2025 (7) TMI 1087 - AT - Customs

Rejection of request for conversion of free shipping bills to drawback shipping bills - rejection of request solely on the ground that the appellant did not file drawback shipping bills at the time of export and the reasons cited for non-filing was not beyond their control hence the proviso to Rule 12 (1) (a) of the Customs Central Excise and Service Tax Drawback Rules 1995 could not be complied - period 25.07.2017 to 04.08.2017 - HELD THAT - By Circular No. 22/2017-Cus. dated 30-6-2017 the exporters were permitted for smooth transition from the existing GST to the new GST regime from 01.07.2017 to 30.09.2017. There are no deficiency on the part of the appellant for not claiming the All Industry Rate of Duty Drawback while filing 11 (eleven) shipping bills between 25.07.2017 to 04.08.2017 when the GST regime was introduced for the first time from 01.07.2017. Further the Circular No.36/2010-Cus dated 23.09.2010 on the issue of conversion of free shipping bills into drawback shipping bills it is clarified that there is no need for allowing conversion however the Commissioner should examine and consider individual request on merits and the said relaxation held to be applicable in respect of drawback claims pertaining to All Industry Rate of Duty Drawback. In the present case the appellant claimed the benefit of All Industry Rate of Duty Drawback; hence covered by the Circular No. 36/2010-Cus dated 23.09.2010 which has been endorsed by the Hon ble Supreme Court in the case of Cargill India Pvt. Ltd. 2015 (11) TMI 378 - SUPREME COURT . The impugned order is set aside - appeal allowed.

Summary

ISSUES:

Whether conversion of free shipping bills filed during the GST transition period into All Industry Rate (AIR) of Duty Drawback shipping bills is permissible.Whether the proviso to Rule 12(1)(a) of the Customs, Central Excise and Service Tax Drawback Rules, 1995 applies to allow such conversion after export when the exporter was unaware of the relevant circular at the time of export.Whether the Circular No. 36/2010-Cus. dated 23.09.2010 permits the Commissioner of Customs to consider requests for conversion of free shipping bills to drawback shipping bills on a case-by-case basis.

RULINGS / HOLDINGS:

The Court held that conversion of free shipping bills filed between 25.07.2017 and 04.08.2017 into All Industry Rate of Duty Drawback shipping bills is allowable, as the exporter requested conversion within the prescribed time after becoming aware of Circular No. 22/2017-Cus. dated 30.06.2017 issued for the GST transition period.The Court found no merit in the rejection based on non-compliance with the proviso to Rule 12(1)(a) since the exporter made the request within two weeks of export and after coming across the relevant circular, thus satisfying the proviso's requirements.The Court affirmed that Circular No. 36/2010-Cus. dated 23.09.2010 clarifies that while there is "no need for allowing conversion," the Commissioner should "examine and consider individual request on merits" for All Industry Rate of Duty Drawback claims, permitting conversion subject to conditions.The impugned order rejecting conversion was set aside, and the appeal allowed with consequential relief as per law.

RATIONALE:

The Court applied the Customs, Central Excise and Service Tax Drawback Rules, 1995, specifically Rule 12(1)(a) and its proviso, which governs amendment of shipping bills and conversion to drawback shipping bills.Circular No. 22/2017-Cus. dated 30.06.2017 was interpreted as a relief measure permitting exporters to claim duty drawback during the GST transition period (01.07.2017 to 30.09.2017) to ensure smooth transition to the new tax regime.Circular No. 36/2010-Cus. dated 23.09.2010 was relied upon to establish that Commissioners have discretionary power to allow conversion of free shipping bills to drawback shipping bills on a case-by-case basis, provided conditions such as timely request and documentary proof of eligibility are met.The Court referenced the Supreme Court judgment in Cargill India Pvt. Ltd. v. Commissioner of Customs & Central Excise, which endorsed the principle that conversion of shipping bills after export is governed by the proviso to section 149 of the Customs Act, 1962, and should be allowed if conditions are satisfied.No dissent or doctrinal shift was noted; the decision aligns with established statutory provisions and prior authoritative interpretations.