2006 (3) TMI 513 - AT - Customs

Conversion of Shipping Bill - DEPB Scheme to DEEC Scheme - statutory rights available to the appellant under Section 149 of the Customs Act, 1962 - HELD THAT - Section 149 entitles the proper officer of Customs to direct amendment of any document, after it has been presented in the Custom House. By the application of conversion of the Shipping Bill, appellant was requesting the proper officer, to exercise this statutory power vested in such authority, to amend a Shipping Bill. 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 in stead 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 right, as also the statutory obligation of the proper officer to amend a document after its presentation in the Custom House cannot be curtailed or set to naught by circulars of the Board. The approach adopted by the Respondent has the effect of inferring from conferring upon the Board Circular, a status of a statute overruling the proviso to Section 149 of the Customs Act, 1962 which is impermissible. Since the entire claim of the appellant is established on the basis of documentary evidence already in existence at the time of export, there was no valid reason for the Commissioner to have refused such an amendment. The impugned order passed is therefore clearly untenable and is to be set aside. The order is set aside and the appeal is allowed.

Summary

Issues Involved:
1. Conversion of DEPB Shipping Bills to DEEC Shipping Bills.
2. Application of Board Circulars and statutory rights under Section 149 of the Customs Act, 1962.
3. Jurisdiction of Commissioner (Appeals) and CESTAT.

Detailed Analysis:

1. Conversion of DEPB Shipping Bills to DEEC Shipping Bills:
M/s. Man Industries (I) Ltd. exported "carbon steel submerged ARC welded pipes" under the DEPB Scheme but later requested conversion to the DEEC Scheme, citing a filing mistake. They provided necessary documentation, including the Chartered Engineer Certificate and Advance Licence, to support their claim. However, their request was initially rejected due to the lack of a declaration regarding exempted material at the time of export and the absence of a Standing Order for such conversion.

2. Application of Board Circulars and statutory rights under Section 149 of the Customs Act, 1962:
The Commissioner (EP) rejected the conversion request based on Board Circular No. 4/2004-Cus., which allows conversion only when benefits are denied by DGFT or Customs due to disputes. The Commissioner concluded that the case did not meet the criteria under Circulars No. 6/2003 and 40/2003, as the exporter voluntarily chose the DEPB Scheme. The Tribunal, however, emphasized that the statutory right under Section 149 of the Customs Act, 1962, allows amendments based on existing documentary evidence at the time of export. The Tribunal criticized the Commissioner for being bound by the Board circulars, which cannot override statutory provisions.

3. Jurisdiction of Commissioner (Appeals) and CESTAT:
The initial appeal to the Commissioner of Customs (Appeals) was dismissed due to jurisdictional issues, as appeals against the Commissioner's decisions lie with the Tribunal. The Tribunal, in its previous order, remanded the case back to the jurisdictional Commissioner for a fresh decision, considering the relevant circulars and Tribunal's precedents in similar cases (Smruti Pottery Works and Sanghi Industries Ltd.). The Tribunal reiterated that benevolent circulars are binding on the department, while assessees can challenge restrictive circulars.

Conclusion:
The Tribunal set aside the Commissioner's order, allowing the appeal by M/s. Man Industries (I) Ltd. The Tribunal held that the Commissioner should have permitted the conversion under Section 149 of the Customs Act, 1962, based on the documentary evidence provided. The Tribunal also directed adherence to its previous rulings and the statutory provisions, emphasizing that the Board's circulars should not curtail statutory rights. The appeal was allowed, and the impugned order was pronounced invalid in court.