TMI Blog2023 (4) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... s then made subject to certain other conditions, primarily the time limit to make the application for conversion, within a period of three months from the date of Let Export Order (LET) - The conditions enshrined in the circular would definitely enable the department to achieve the objective to avoid duplicacy of the benefit which would prejudice the revenue. If the request / application seeking conversion is made within a specified period, it would enable the department to verify the claim diligently and promptly as also the availability of the documents. In the present case as noted by the adjudicating authority there has been delay of nearly 6 months to 1 year which is beyond the permissible time limit and for which no reason have been stated by the appellant. The next condition under the circular is regarding the satisfaction of the Commissioner of Customs on the basis of the documentary evidence as without it, it would not be feasible for the department to verify the claim for conversion. As is evident from the circular, the specific requirement is that the documents must show the use of the inputs in the resultant export product, fact of export and the fulfilment of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 04.10.2011 2.12.10 to 26.2.10 14 665 0510285443 Dated 2.12.10 2 9.11.11 2.12.10 to 26.2.12 233 14435 0510278443 dt. 8.3.11 3 29.12.11 16.11.10 to 25.11.10 468 12545 0510262749 Dt. 21.4.10 4 19.1.12 1.5.11 to 23.5.11 1195 32980.170 0510289161 Dt. 20.04.12 4. The request of IOC in terms of the aforesaid applications for conversion of DEEC shipping bills to drawback shipping bills for the purpose of availing duty drawback were examined in terms of the provisions of section 149 of the Customs Act read with the CBEC's Circular No. 36 / 2010-Cus dated 23.09.2010, however the same were found to be time barred and were accordingly rejected vide order dated 15.02.2012. On the request of the appellant vide letter dated 16.04.2012, the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discretion, authorise any document, after it has been presented in the customs house to be amended:[In such form and manner, within such time, subject to such restrictions and conditions, as may be prescribed]; Provided that no amendment of a bill of entry or shipping bill or bill of export shall be so authorised to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be. 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 for deciding whether the goods are entitled to drawback, and if so, at what rate or rates and make a declaration on the relevant shipping bill or bill of export that (i) a claim for drawback under these rules is being made; (ii) in respect of duties of Customs and Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above. It is clarified that Commissioner of Customs may allow conversion of shipping bills from schemes involving more rigorous examination to schemes involving less rigorous examination (for example, from Advance Authorization/DFIA scheme to Drawback/DEPB scheme) or within the schemes involving same level of examination (for example from Drawback scheme to DEPB scheme or vice versa) irrespective of whether the benefit of an export promotion scheme claimed by the exporter was denied to him by DGFT/DOC or Customs due to any dispute or not. The conversion may be permitted in accordance with the provisions of section 149 of the Customs Act, 1962 on a case to case basis on merits provided the Commissioner of Customs is satisfied, on the basis of documentary evidence which was in existence at the time the goods were exported, that the goods were eligible for the export promotion scheme to which conversion has been requested . Conversion of shipping bills shall also be subject to conditions as may be specified by the DGFT/MOC. The conversion may be allowed subject to the following further conditions: a) The request for conversion is made by the exporter within three months from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly acknowledge receipt of this Circular. 10. We now need to consider the rulings of the various Courts/Tribunals interpreting the provisions of section 149 along with the Circular on the subject. The Learned Counsel for the appellant has placed reliance on the decision of the Tribunal Chennai Bench in Diamond Engg. (Chennai) P. Ltd. Vs C. C. (Seaport-Export), Chennai, which decided the issue taking the view that the Circular is beneficiary in nature and the fact that section 149 of Customs Act does not prescribe any time limit, the amendment sought cannot be denied on the ground of limitation. The Learned Single Member distinguished the decision of the Delhi High Court in M/s Terra Films Pvt. Ltd., vs. Commissioner of Customs 2011 (268) ELT 443 being factually different. The Hon‟ble High Court of Madras rejected the appeal filed by the department against the said order holding that no substantial question of law is involved, Commissioner of Customs Vs. M/s Diamond Engg. Chennai P. Ltd. 2019 - TIOL-HC-MAD-CUS. In so far as the present case is concerned, we do not find the same being distinguishable from the decision of the Delhi High Court in M/s. Terra (supra) and be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipping bill even after the goods have been exported, the only requirement is that the exporter has to produce documentary evidence which was in existence at the time when goods were exported relying on the decision of the jurisdictional High Court in M/s Hewlett Packard Enterprises India Pvt. Ltd., Vs Joint Commissioner of Customs 2020 (10) TMI 970 , however, the decision of the Delhi High Court in M/s Terra (supra) was not taken note of. The decision in Autotech Industries was followed in M/s Carboline India Pvt. Ltd., Vs Commissioner of Customs, Chennai 2022 (381) ELT 397 holding that circular cannot be applied to reject the request of conversion / amendment of shipping bills. 11. We may now refer to the decisions cited by the Learned authorised representative for the revenue. The decision of the Delhi High Court in M/s Terra Films Pvt. Ltd., (supra), where the learned Division Bench dealt with similar fact situation of a request for conversion of the DEEC/DEPB shipping bills into DEEC/DEPB cum Drawback Scheme after lapse of more than one year though the shipping bills had mentioned about the scheme under which exports were made as DEEC/DEPB and the goods stood already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, but it will be case of conversion of one scheme to another scheme, for which, proper officer is required to verify whether the very manufactured final product which has been manufactured from the raw material has been exported or not. 7. The contention on behalf of the petitioner that as the case would fall under Section 149 of the Customs Act which does not prescribe any time limit and therefore, on the basis of material on record, which was available at the time of export, it could have been verified whether final goods manufactured from the raw material imported has been exported or not, can be verified is concerned, as such, as observed herein above Section 149 of the Customs Act will not be applicable. Even otherwise, it is required to be noted that what is considered at the time of DECC, the appropriate inquiry would be limited to the extent to satisfy the authority whether raw material which was imported has been used in manufacturing final product or not. So far as Advance Authorisation Scheme is concerned, the appropriate authority is required to consider after holding appropriate inquiry that the raw material which was imported has only been used in the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a shipping bill was to be allowed after the export goods have been exported except on the basis of the documentary evidence, which was in existence at the time the goods were exported. The submission of the learned counsel for the appellant/ exporter in this regard was that the exporter was in possession of all the documents at the time of export to show that it was entitled to claim under the DEPB/DECC cum drawback scheme. From the plain reading of Section 149, it may be seen that exporter could not claim amendment in routine and as a matter of right. The discretion vested in the Proper Officer to permit amendment in any document after the same has been presented in the Customs house. Though this discretion was to be exercised judiciously, but it was qualified with the proviso that the amendment could be allowed only if it was based on the documentary evidence in existence at the time the goods were exported. The Commissioner in the remand case has rightly observed that the present case in fact relates to the request for conversion of shipping bills from one export promotion scheme into another and was not merely of an amendment in the shipping bill. The request was made for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on a case to case basis on merits provided the Commissioner of Customs is satisfied on the basis of documentary evidence which was in existence at the time the goods were exported to ascertain that goods were eligible for the export promotion scheme to which conversion has been requested. The conversion was then made subject to certain other conditions, primarily the time limit to make the application for conversion, within a period of three months from the date of Let Export Order (LET). The other conditions relate to the specifications of the documentary evidence. In interpreting the applicability of the circular and whether the conditions set out are mandatory or directory, we need to look into the object in adding those conditions in the circular. The underline object of the circular no doubt is to relax the norms for granting conversion of one export promotion scheme to another, however at the same time the circular provides that due care should be taken to ensure that the exporter does not take the benefit of both the schemes, i. e. the scheme to which conversion is sought and the scheme from which conversion is sought. The conditions enshrined in the circular would defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms dated 23.09.2010. We would also like to take note of the contention raised by the appellant that their application dated 13.02.12 for conversion of 3881 shipping bills was within 3 months from the date of Let Export Order‟ but the adjudicating authority found that no export documents for which conversion is sought were submitted by them to the department even till the date of the order. The appellant has referred to their letter dated 16/17.04.2012 whereby according to them they had submitted the documents. The said letter has been submitted much after the rejection order dated 15.02.2012 by the competent authority and therefore the same has no relevance. We cannot ignore these findings though the appellant had submitted that they have filed the requisite documents. 15. We would like to refer to the decision in Indian Aluminum Company Ltd Vs Thane Municipal Corporation 1991(55) ELT454, where the Apex Court observed that in the matter of exemption or concessions the non observance of even procedural condition should not be condoned, if it is likely to facilitate commission of fraud and introduce administrative inconveniences. Further, the Court was pleased to observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equires to be strictly followed. 18. The violation of the above two conditions of making the application within the time limit of 3 months and also filing of the requisite documents, the appellant is not entitle for conversion of the DEEC shipping bills to Drawback shipping bills. The benefit of conversion from one export promotion scheme to another is by virtue of the circular so the appellant cannot say that they are entitle to claim the benefit under the circular but at the same time they are not required to comply with the conditions stipulated therein. The appellant cannot pick and choose the terms of the circular. 19. The contention raised by the appellant that the circular by prescribing the period of 3 months for making the application for conversion of the scheme is beyond the provisions of section 149 of the Customs Act is already unsustainable. We do not agree with such a submission for the simple reason that section 149 is silent on the aspect of limitation and the circular has only filled in that lacuna which does not amount to overriding the statutory provision. A circular though being a subordinate legislation can very well provide for the actual modalities for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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