2009 (12) TMI 560 - AT - Customs

Drawback Conversion of free shipping bills to drawback shipping bills Soya bean meal exported and drawback cannot claimed due to ignorance of its entitlement - entitlement to 1% All Industry Rate drawback requested for conversion of the free shipping bills into drawback shipping bills - Commissioner rejected the request for the reason that the asessees had failed to comply with the provisions of Rule 12(1)(a) of the Drawback Rules, 1995 not for reasons beyond his control - appellants case is covered by the said Rule 12(1)(a) of the Drawback Rules - Commissioner erred in holding that its failure to file a drawback shipping bill owing to ignorance of its entitlement is not a reason beyond the control of the exporter

Summary

Issues:
1. Conversion of free shipping bills into drawback shipping bills under Rule 12(1)(a) of the Drawback Rules, 1995.

Detailed Analysis:

Issue 1: Conversion of free shipping bills into drawback shipping bills under Rule 12(1)(a) of the Drawback Rules, 1995
The case involved appeals filed by M/s. Cargill India Pvt. Ltd. regarding the conversion of 14 shipping bills for export of Soyabean Meal into drawback shipping bills. The Commissioner rejected the conversion request based on Rule 12(1)(a) of the Drawback Rules, 1995, which requires exporters to comply with specific provisions at the time of export to claim drawback. The Commissioner found that the appellants failed to provide satisfactory reasons for not filing drawback shipping bills at the time of export. The appellants argued that their ignorance about the entitlement to drawback on the export of Soya bean meal was beyond their control, justifying the conversion request.

The appellants relied on various case laws to support their request for conversion, emphasizing that exporters should be allowed to convert free shipping bills into drawback shipping bills if entitled to drawback. The Tribunal examined the facts and submissions, noting that the appellants exported Soya bean meal under free shipping bills and later sought conversion upon realizing their entitlement to drawback. The Tribunal disagreed with the Commissioner's decision, stating that the appellants' failure to file a drawback shipping bill due to ignorance of their entitlement qualifies as a reason beyond their control under Rule 12(1)(a) of the Drawback Rules, 1995.

Moreover, the Tribunal referred to previous decisions where exporters were allowed to seek conversion of shipping bills under Section 149 of the Customs Act, 1962. Citing these precedents, the Tribunal allowed the appeal filed by M/s. Cargill India Pvt. Ltd., granting them the conversion of free shipping bills into drawback shipping bills. A similar decision was made for Appeal No. C/185/2009, involving 16 shipping bills, where the Tribunal allowed the appeal based on the same reasoning and precedent established in the previous case.

In conclusion, both appeals were disposed of in favor of the appellants, emphasizing the exporters' right to seek conversion of free shipping bills into drawback shipping bills when entitled to drawback, even if the initial omission was due to ignorance, as long as it qualifies as a reason beyond the exporter's control under the relevant rules and regulations.