2011 (7) TMI 750 - AT - Customs

DEEC scheme - erroneously the shipping bills were filed under DEPB scheme instead of DEEC scheme, which was detected subsequently - Circular No. 4/2004-Cus dated 16.1.2004 - On the basis of DC s Note, the Additional Commissioner agreeing with the Dy. Commissioner put up the file to the Commissioner, who agreeing with the lower authorities disallowed the conversion from DEPB to DEEC - The Consultant on behalf of the appellant submits that carbon content used in the steel falls within the range as prescribed in the Internet definition - While deciding the case, the Commissioner should give an opportunity to the exporter to produce all the evidences in support of their case to prove that export product was manufactured as per SION out of mild steel and as per the imported raw materials allowed by DGFT against their advance licence - Appeal is allowed by way of remand Commissioner (Export)

Summary

Issues:
1. Conversion of shipping bills from DEPB scheme to DEEC scheme.
2. Rejection of conversion based on Circular No. 4/2004 dated 16.01.2004.
3. Failure to meet conditions (b) and (c) of the Circular.
4. Lack of a speaking order and violation of principles of natural justice.
5. Determination of whether the export product was manufactured out of mild steel.

Analysis:
1. The appeal was filed against the rejection of the conversion of shipping bills from the DEPB scheme to the DEEC scheme. The appellant had mistakenly filed the shipping bills under the DEPB scheme instead of the DEEC scheme. They sought conversion based on the Commissioner (Appeals) order allowing it. However, subsequent rejections were made citing Circular No. 4/2004 dated 16.01.2004.

2. The rejection was based on the failure to meet the conditions outlined in the Circular, specifically conditions (b) and (c). The appellant argued that the export documents available could prove the use of relevant inputs required for the export product. They also presented a certificate from the Range Superintendent confirming the use of imported mild steel in the manufacturing process.

3. The Tribunal noted that the rejection lacked a clear finding by the Commissioner and did not follow the principles of natural justice. The order was deemed non-speaking and passed without giving the exporter an opportunity to explain their case adequately. Thus, the order was set aside on these grounds.

4. The debate centered on whether the export product was genuinely manufactured out of mild steel. The Revenue argued that the carbon content in the export products did not align with the definition of mild steel, as per Internet sources. The appellant contended that the carbon content fell within the range specified in the Internet definition and highlighted the absence of specific carbon content in the SION note.

5. Ultimately, the Tribunal remanded the matter to the Commissioner (Export) for a fresh decision. The Commissioner was directed to allow the exporter an opportunity to present all documentary evidence supporting their case. The Commissioner was also instructed to specify the total duty involved in the shipping bills and resolve the issue within four months from the receipt of the order.

This detailed analysis covers the issues raised in the legal judgment comprehensively, addressing the key arguments and decisions made by the Tribunal.