TMI Blog2023 (10) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... RINCIPAL COMMISSIONER OF CUSTOMS, MUNDRA VERSUS M/S LYKIS LIMITED [ 2021 (2) TMI 261 - GUJARAT HIGH COURT] which has been reiterated by the Hon ble Bombay High Court in COLOSSUSTEX PRIVATE LIMITED AND TODI RAYONS PRIVATE LIMITED VERSUS UNION OF INDIA, THE CENTRAL BOARD OF EXCISE AND CUSTOM, THE DEPUTY COMMISSIONER OF CUSTOM, MAHARASHTRA, THE COMMISSIONER OF CUSTOM NS-II, THE ASSISTANT COMMISSIONER OF CUSTOMS NS-II, RAIGAD, [ 2023 (9) TMI 313 - BOMBAY HIGH COURT] . In which Hon ble High Court of Bombay has also struck down the limitation of 3 months from the let export order in aforementioned circular. With the point of emphasis of the appellants being that the amendment should have been allowed in the shipping bill to them from DFIA Scheme to Drawback as claimed by them and the denial of the same through amendment or otherwise as export benefit was totally unfair and not maintainable. It is grievance of the the appellants that Commissioner not having given any detailed rejection order, they are probing in dark for reasons as could have prevailed with the department in denying them the export benefit - It is found that since, October, 2015 despite doing exports in the year 2013- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince, printed cotton fabrics were exempted from whole of duty of excise it had not obtained Central Excise Registration. It procures all raw materials/ inputs locally from the DTA. Almost all the production of appellant was being exported out of India. 3. Appellant had applied for Duty Free Import Authorisation (DFIA) and obtained 13 DFIA scripts from the DGFT, Rajkot during the period from 17.09.2013 to 15.01.2014. It had entered details of the said scripts in 42 shipping bills filed for export of goods at MP SEZ port, Mundra as shown below to claim fulfillment of the export obligation. Sr. No . DFIA License No. date S/B No. Date of S/B Sr. No. DFIA License No. date S/B No. Date of S/B 1 2410039936 17.09.2013 7586312 21.09.13 8 2410040133 21.10.2013 8469205 16.11.13 7590297 21.09.13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 8273114 01.11.13 9466340 13.01.14 8273777 01.11.13 9467173 13.01.14 8275552 01.11.13 9471906 13.01.14 7 2410040132 21.10.2013 8469178 16.11.13 13 2410040595 15.01.2014 9557213 18.01.14 8469288 16.11.13 9557258 18.01.14 8469237 16.11.13 9614702 22.01.14 3.1 The said licenses were issued for export and import of Relevant Cotton Processed Fabrics , which were later on amended for import of Relevant Cotton processed fabrics GSM 122.81 +/- 10%... GSM 130.32 +/- 10%...and GSM 133.25 +/- 10% against/for export of Relevant Cotton processed fabrics GSM 122.81, GSM 130.32 and GSM 133.25 for quantity value in respect to import export as mentioned in respective authorization as per amendment sheets 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt incentive schemes aimed to earn maximum foreign exchange for the nation would get defeated. 6.2 Appellant further submits that in terms of Section 149 of the Customs Act, 1962 read with CBEC s Circular No. 36/2010-Cus dated 23.09.2010, it was eligible for such conversion/amendment in relevant shipping bills on merits i.e. 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 was requested. In fact, the Board s circular dated 23.09.2010 giving instructions to the Commissioners for permitting conversion of shipping bills from one export incentive scheme to the other is very liberal, as compared to restrictions placed under Board s superseded circular No.4/2004-Cus dated 16.01.2004. Relevant para of the circular dated 23.09.2010 are reproduced for ease of perusal please: 3. The issue has been re-examined in light of the 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 sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conversion to ensure that the exporter does not take benefit of both the schemes i.e. the scheme to which conversion is sought and the scheme from which conversion is sought. Whenever conversion of a shipping bill is allowed, the same should be informed to DGFT so that they may also ensure that the exporter does not take benefit of both the schemes. It was thus emphasized by the appellant that conversion as solicited by them was permissible as per above provisions read with the conditions (a) to (e), that appellant s request for amendment/ conversion of shipping bills was justified in all respects, except that application was not filed within three months of LEO (condition-(a) above). However, the same can be condoned as procedural lapse, especially because section 149 of the Customs Act, 1962 does not specify such a period. Appellant further submits that condition (b) of the circular does not apply in its case as no goods were imported for utilization in export goods against DFIA. This apart, it is further submitted that the said circular also emphasizes that Commissioner of Customs may allow conversion of shipping bills from schemes involving more rigorous examination su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I shipping bills - Writ applicant sought insertion of declaration in shipping bills that We intend to claim rewards under MEIS as also revocation of suspension of Duty Credit Scrips issued - HELD : Authorities were under confusion as to whether declaration as per Clause 3.14 of Handbook of Procedures, 2015-20 was mandatory prior to 1-6-2015; and hence, sought clarification from DGFT - While awaiting such clarification, three Duty Credit Scrips issued to writ-applicant by respondents themselves against six applications - Reliance upon Rule 46(1)(c) of Special Economic Zones Rules, 2006 as amended vide M.C. I. (D.C.) Notification No. G.S.R. 909(E), dated 19-9-2018 completely misplaced since exports in question made during period between 1-4-2015 and 31-5-2015, at which point of time, said Rule 46 ibid did not provide for examination of goods where MEIS benefits are claimed - Section 149 of Customs Act, 1962 specifically permits amendment of shipping bills even after export on basis of documentary evidence in existence at time of export of goods - Moreover, neither time limit prescribed nor fixing of time limit by way of rules or regulations provided in said Section 149 ibid durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ription, value, etc. - Since all relevant substantive particulars are available, fault of mere non-filing of declaration not fatal to appellant s claim on export benefits - Customs authorities directed to amend shipping bills in terms of appellant s request within two months - Section 149 of Customs Act, 1962. [paras 7, 8] EXIM - Handbook of Procedures - Amendments therein - Scope of - While Foreign Trade (Development Regulation) Act, 1992, Rules/ Regulations framed thereunder and FTP have force of law, Handbook of Procedures and amendments carried out thereto are, per se, not declaration of law - They only impose conditions which are to be fulfilled and otherwise conform to requirements of law. [para 7] V.R.A. COTTON MILLS PVT. LTD. Vs. COMMISSIONER OF CUS., JAMNAGAR (PREV.) in 2014 (309) E.L.T. 100 (Tri. - Ahmd.) Shipping bills - Conversion of DFIA shipping bills to drawback scheme - Time-limit for conversion - Export of goods viz. Indian Raw Cotton Shankar-6 of Heading 5201 of Customs Tariff Act, 1975 and subsequently no import of any goods as per DFIA, not disputed - Cancellation of DFIA on appellants request by DGFT on 10-7-2013 - Para 4.28(e) of HBP Vol.-I, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per officer, to exercise this statutory power vested in such authority, to amend a Shipping Bill. The statutory conditions subject to which such amendment could or could not be made is described in the proviso to Section 149 of the Customs Act, 1962, which reads as: Provided that no amendment of a bill of entry or a shipping bill or bill of export shall be so authorized 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. It is not in dispute that the requirements of abovementioned proviso are satisfied by the appellant and consequently Commissioner ought to have allowed the request for conversion instead of bound by the terms of a Board circular which laid down certain situations, only in which conversion was permitted. That the appellants case was not specifically covered by one of the situations contemplated in the Board's circular cannot deny the appellants statutory right, to seek any amendment same is lost. The statutory r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be set aside. 2.4 The Commissioner has also erred in not following the ratio laid down by this Tribunal in the case of Smriti Pottery Works v. CC, Kandla and the reasons assigned by the Commissioner is clearly incorrect. 3.1 In view of the findings hereinabove, the order is set aside and the appeal is allowed. 6.4 Appellant further submits that the department had preferred an appeal against the above decision of Hon ble Tribunal in the High Court of Bombay but the same was also dismissed as reported at 2007 (216) E.L.T. 15 (Bom.). Thereafter the Revenue had challenged the said decision of Hon ble High Court in C.A. No. 4244 of 2007 before the Apex Court. The Hon ble Supreme Court Bench while dismissing the appeals, passed the following order, as reported at 2015 (326) E.L.T. A34 (S.C.): After hearing learned counsel for the parties, we are convinced that what was sought was the amendment of documents only and would squarely be covered under Section 149 of the Customs Act, 1962. The appeals are accordingly dismissed. DIAMOND EGG. (CHENNAI) P. LTD. Versus C.C., (SEAPORT-EXPORT), CHENNAI: 2013 (288) E.L.T. 265 (Tri. - Chennai), AMRITSAR SWADESH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subscribing any reason in gross violation of the principles of natural justice as well as in violation of the Board s instructions contained in the above circular. He has also failed to appreciate that it is settled law that quasi-judicial officer is bound to follow judicial discipline. The advocate for the appellant pleaded for directing amendment of shipping bills as requested by them. 6.6 The learned A.R on his part justified the rejection of the claims by the office of Commissioner. 7. Considered. In the instant case, the issue pertains to denial of export benefit to the appellants by disallowing their request of conversion from DFIA shipping bills to Drawback Scheme. Same was denied to them by the Commissioner without any reasoned order through the impugned order, the order is in the nature of letter conveying the decision of Commissioner of Customs. The rejection of conversion request dated 12.07.2023 made by the appellants has been done vide letter dated 18.01.2018 of the Commissioner of Customs without giving any reason. The copy of the order is reproduced below : 7.1 The appellants in this regard had surrendered unutilized DFIA after the export was made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cancellation of DFIA. They have been in denial of the benefit both by the joint DGFT authority as well as Customs authorities due to lack of response or lack of proper response. Left in a limbo, appellant have filed present appeal against letter of rejection considering the same as appealable as they are aggrieved by the same. We find that such denial of export benefit even when export has taken place is not worthy of approval. Commissioner could have easily considered the claim by allowing amendment under Section 149 by allowing conversion of shipping from DFIA to Duty Drawback Scheme. We also find that the denial of cancellation by Joint DGFT authorities is also unfair for such a long time, as such cancellation by DFIA and issuing of cancellation order by DGFT is a noted practice even by this Tribunal in the matter of 2014 (309) ELT 100 (Tri.-Ahm.), in the matter of M/s V.R.A COTTON MILLS PVT LTD. VS. COMMISSIONER OF CUSTOMS-JAMNAGAR (PREV) which is reproduced below:- 6 . The issue involved in this case is whether the appellant s application for conversion of Shipping Bills from DFIA to Drawback scheme needs to be allowed or otherwise, when such application filed on 20-7-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner to condone non-observance of provisions of Rule 12 and allow Drawback. This is nothing but an amendment or conversion of the Shipping Bill filed. The circular issued by the Board goes beyond the Rules. In fact Section 149 of Customs Act, 1962 clearly permits amendment of Shipping Bill without any such time limit even after export of goods. The section is reproduced below : Section 149 : Amendment of documents. - Save as otherwise provided in Sections 30 and 41, the proper officer may, in his discretion, authorize any document, after it has been presented in the custom house to be amended : Provided that no amendment of a bill of entry or a shipping bill or bill of export shall be so authorized 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. 8.3 Documents submitted by the appellant like contracts for exports, Test analysis reports by Cotton Association of India, Shipping Bills were signed cleared by proper Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DFIA to Drawback Scheme needs to be allowed. 8.6 The provisions of Para 4.28(e) of HBP Vol.-I, 2009-14, Rule 12 of Customs, Central Excise Duties and Service Tax Drawback Rules and Section 149 of the Customs Act, 1962 has not specifically prescribed any such time limitation of 3 months for applying for the conversion of Shipping Bill. 8.7 I find that in the relied upon decisions on behalf of appellant, 2012 (281) E.L.T. 173 (Ker.) - Leotex v. UOI, the Hon ble High Court has allowed conversion from DEPB to Drawback Scheme observing in Para 4 as under Circular dated 23-9-2010 is not mandatory at all. In fact, the latest Circular dated 23-9-2010 shows that in view of the decisions of the Tribunal and this court on the question, the Government themselves had decided to liberalise the provision regarding even conversion from one scheme to another. 8.8 I find that in the relied upon decisions on behalf of appellant, 2013 (298) E.L.T. 123 (Tri.-Ahd.) - Rajguru Impex (India) Ltd. v. CC, this Bench has also allowed conversion from DFRC to DEPB scheme observing in Paras 9, 10 as under :- Description of goods in Shipping Bill had to be taken as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue has been considered by the Board in detail and it is stated therein that conversion should be permitted in accordance with the provision of Section 149 of 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 and that the goods were eligible for the export promotion scheme to which conversion has been requested I find that facts of the said case are totally different than the issue in hand. I find that on deeper perusal of the judgment, it transpires that supporting evidences were not in existence at time of export of goods. In view of this, I find that the Hon ble High Court has taken a view in facts of the said case, which may be applicable in situation which is similar or identical case. For the case in hand, appellant s exports are not in any dispute as regards description, quality, quantity, value, BRC, etc., having no import against DFIA the substantial benefit on such exports now available need not be denied. 10 . Division Bench of this Court has taken view that conversion can be allowed in such cases, I do not f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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