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Cargill India Private Limited Versus Commissioner of Customs And Central Excise, Visakhapatnam-II

2015 (11) TMI 378 - SUPREME COURT

Benefit of duty drawback - Conversion of free shipping bills into drawback shipping bills - Circular No. 04/2004 dated 16.01.2004 - Held that:- conversion is permissible only when the exporter is able to satisfy the Commissioner that "for reasons beyond his control" drawback was not claimed. In the instant case, a finding of fact is arrived at by the Commissioner (Customs), which has been accepted by the High Court also, that no case was made out by the appellant to suggest that claim for duty d .....

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e Board was still of the opinion that it was permissible for the Commissioner to examine and consider individual requests on merits and facts in terms of the aforesaid provisions and the 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 Duties Drawback Rules.

Appellant wanted only "All Industry Ra .....

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aforesaid aspect viz. the goods are not prohibited. Since in the present case, goods are not dutiable, no duty has to be paid.

Therefore, there was no reason for denying the benefit only on the ground that at the time when the appellant had sought the duty drawback, the goods could not be physically examined. This position is further supported when we compare the fundamental provisions of Section 113 with the amendment to the said Section carried out by the Finance Act, 2003 (w.e.f. .....

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: Mr. V. Sridharan, Sr. Adv. Mr. M. P. Devanath,Adv. Mr. S. Vasudevan, Adv. Ms. L. Charanaya, Adv. Ms. Shagun Arora, Adv. Mr. Hemant Bajaj, Adv. Mr. Anandh K., Adv. Mr. Aditya Bhattacharya, Adv For the Respondent : Mr. A.K. Sanghi, Sr. Adv. Mr. Arijit Prasad, Adv. Mr. Vikas Singh Jangra, Adv. Ms. Rashmi Malhotra, Adv. Mr. B. Krishna Prasad, Adv JUDGMENT A. K. Sikri, J. Both these appeals are filed by the same appellant who is an exporter of a variety of food and agriculture related products. Du .....

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sioner (Customs) for conversion of the said free shipping bills into drawback shipping bills under Rule 12(1)(a) of the Rules. At the time of arguments, before the Commissioner, the appellant also referred to Circular No. 04/2004 dated 16.01.2004 on the basis of which it was arguned that even the conversion of free shipping bills into drawback shipping bills was not needed as the said circular, under the given circumstances, gave discretion and authorized the Commissioner to give the duty drawba .....

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le for him to seek conversion of the free shipping bills into duty drawback bills under the aforesaid Rules. Referring to Circular No. 04/2004 dated 16.01.2004, the Commissioner opined that since the goods under free shipping bills were not physically examined and there was no evidence to support the description, quantity and value in the absence of physical examination of the goods which is the case of regular drawback shipping bills, the benefit of the said circular also could not be given to .....

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er by filing an appeal under Section 35 of the Central Excise Act read with Section 130 of the Customs Act. In this appeal, the Department has succeeded. A perusal of the order of the High Court would show that the appeal of the Department is allowed for reasons recorded in CEA No. 280/2010. Copy of the order passed in CEA No. 280/2010 has also been annexed along with the present appeal filed by the appellant challenging the order of the High Court. We may record here that almost on identical fa .....

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ut seeking conversion? Insofar as the first issue is concerned, after going through the order of the High Court, we are in complete agreement therewith. Rule 12(1)(a) of the Rules read as under: "Rule 12. Statement/Declaration to be made on exports other than by Post.-(1) In the case of exports other than by post, the exporters shall at the time of export of the goods - (a) state on the shipping bill or bill of export, the description, quantity and such other particulars as are necessary fo .....

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or service tax under the Central Excise Rules, 2002 or any other law has been or will be made to the Central Excise authorities. Provided that if the Commissioner of Customs is satisfied that the exporter or his authorised agent has, for reasons beyond his control, failed to comply with the provisions of this clause, he may, after considering the representation, if any, made by such exporter or his authorised agent, and for reasons to be recorded, exempt such exporter or his authorised agent fro .....

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he appellant. It is rightly pointed out that merely because the appellant was not aware of the correct legal position would not afford any such ground that it was beyond his control. Coming to the second issue as noted above, the appellant had made a specific plea before the Commissioner(Customs) at the time of personal hearing to the effect that even without the request for conversion of free shipping bills into drawback shipping bills, the appellant was entitled to duty drawback claim having r .....

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lso states that there is no need to allow conversion as Commissioner may examine and consider individual requests on merits and facts in terms of the provisions as per the Customs and Central Excise duties and Service tax Drawback Rules, 1995. In the subject case, the goods under free shipping bills were not physically examined. Let export order was given, EGMs were closed in the EDI system and the EP copies of the shipping bills were also generated. The bills are no more alive and are in the cu .....

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provisions of Rule 13(2), 13(3) and 13(4) the electronic shipping bill itself shall be treated as the claim for drawback. In this case, the department did not prevent him from filing drawback shipping bills nor any valid reasons exist for not filing the drawback claim by the exporter himself. In view of this, question of conversion does not arise. Further, the exporter, after filing free shipping bills in EDI, had submitted his claim through their lawyer for conversion of the same into drawback .....

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issue at all. It appears that when the matter was argued before the High Court, the High Court also confined the discussion only on the first issue. Since on the first issue we have accepted the view taken by the High Court, it becomes necessary to deal with this issue though it has not been gone into either by the Tribunal or the High Court. After perusing Circular No. 04/2004 dated 16.01.2004, along with some relevant provisions of the Customs Act, we find that the treatment given by the Comm .....

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mp; Customs and the issue was reexamined, which resulted in the issuance of the aforesaid circular. After taking note of the provisions contained in Rule 12(1)(a) of the Rules which undoubtedly state that "no provision exists for permitting conversion of free shipping bills into drawback shipping bills", the Board was still of the opinion that it was permissible for the Commissioner to examine and consider individual requests on merits and facts in terms of the aforesaid provisions and .....

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cise 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 Duties Drawback Rules." It is not in dispute, as has been recorded by the Tribunal .....

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ry thereof by presenting to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration as to the truth of its contents. 51. Clearance of goods for exportation.-Where the proper officer is satisfied that any goods entered for ex .....

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e of clearance of the goods meant for export and therefore, the inspection is confined to the aforesaid aspect viz. the goods are not prohibited. Since in the present case, goods are not dutiable, no duty has to be paid. Therefore, there was no reason for denying the benefit only on the ground that at the time when the appellant had sought the duty drawback, the goods could not be physically examined. This position is further supported when we compare the fundamental provisions of Section 113 wi .....

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d for the loading of such goods; (b) any goods attempted to be exported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the export of such goods; (c) any dutiable or prohibited goods brought near the land frontier or the coast of India or near any bay, gulf, creek or tidal river for the purpose of being exported from a place other than a land customs station or a customs port appointed for the loading of such goods .....

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tion 33 or section 34; (g) any dutiable or prohibited goods loaded or attempted to be loaded on any conveyance, or water-borne, or attempted to be water-borne for being loaded on any vessel, the eventual destination of which is a place outside India, without the permission of the proper officer; (h) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77; (i) an .....

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of drawback under section 75;] (j) any goods on which import duty has not been paid and which are entered for exportation under a claim for drawback under section 74; (k) any goods cleared for exportation under a claim for drawback which are not loaded for exportation on account of any willful act, negligence or default of the exporter; his agent or employee, or which after having been loaded for exportation are unloaded without the permission of the proper officer; 1[(l) any specified goods in .....

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by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the export of such goods; (c) any 1[***] goods brought near the land frontier or the coast of India or near any bay, gulf, creek or tidal river for the purpose of being exported from a place other than a land customs station or a customs port appointed for the loading of such goods; (d) any goods attempted to be exported or brought within the limits of any customs are .....

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pted to be water-borne for being loaded on any vessel, the eventual destination of which is a place outside India, without the permission of the proper officer; (h) any 4[***] goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77. 5[(i) any goods entered for exportation which do not correspond in respect of value or in any material particular with the entry made under this Act or in the .....

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