2014 (1) TMI 1674 - AT - Customs

Conversion from duty drawback to DEPB scheme shipping bills - Held that - It is seen that prior to the export itself, the appellant had intimated the Revenue about their interest in export under DEPB scheme and non-acceptance of the request of higher rate by the EDI system. The Commissioner has observed that the appellant could have done the manual amendments for claiming the benefit of DEPB higher rate. However, it is not understood as to when the appellant has clearly intimated the Revenue about their intention to avail DEPB benefit and the fact of non-acceptance by EDI system, why the Revenue did not guide the appellant to do the changes by a manual process. The observations of the Commissioner that the exporter on their own had opted for the duty drawback scheme at the rate of 4% incentive, cannot be appreciated inasmuch as the exporter had, prior to the exports intimated the Revenue about filing of shipping bills under protest and to subsequently claim their conversion under DEPB scheme. - appellant s request for conversion from duty drawback to DEPB scheme shipping bills is proper and fair - Decided in favour of assessee.

Summary

Issues: Conversion of shipping bills from duty drawback to DEPB scheme.

In this case, the appellant, an exporter, filed 91 Shipping Bills for export of combed hosiery yarn on cone under the Duty Drawback scheme. Before filing these shipping bills, the appellant had informed the Revenue officer about the increased DEPB rate from 3.67% to 7.67% and their intention to file under duty drawback scheme due to the EDI system not accepting the higher rate. The appellant planned to request conversion to DEPB shipping bills later. The appellant applied for conversion after completing exports but was denied by the Commissioner. The Tribunal noted that the appellant had intimated the Revenue about their intention to claim DEPB benefits before exports and found no merit in the Revenue's argument against conversion. The Tribunal held that the appellant's request for conversion was justified, setting aside the Commissioner's decision and granting the conversion with consequential relief to the appellant.

The Commissioner had cited Circular No. 4/2004-Cus. and Public Notice No. 102/RE-2008 (2004-09) to argue against the conversion. However, the Tribunal disagreed with the Commissioner's stance, emphasizing that conversion from one export promotion scheme to another should not be ordinarily allowed. The key issue was whether the appellant's request for conversion was justified, given their prior intimation to the Revenue about their intention to avail DEPB benefits and the EDI system's limitations. The Tribunal found that the Revenue's failure to guide the appellant on manual amendments, despite being informed about the situation, weakened their argument against conversion. Ultimately, the Tribunal ruled in favor of the appellant, deeming the conversion request fair and proper, and granted the conversion to DEPB scheme shipping bills along with consequential relief.