2012 (10) TMI 10 - AT - Customs

Denial of conversion of shipping bill from duty drawback scheme to advance licence scheme - denial made on ground that drawback has already been sanctioned, appellant not covered by Board s Circular No.4/2004-Cus. dt. 16.1.2004 - goods require rigorous examination at the time of export under advance licence scheme - Held that - With regard to first ground for denial, the appellants are ready to pay drawback availed by them along with interest. Therefore, the claim cannot be denied on this ground. The denial on the ground that the Board s Circular No.4/2004-Cus. dt. 16.1.2004 is not sustainable as the conversion under advance licence scheme has not been denied by the DGFT or Ministry of Commerce or Customs due to any dispute. Therefore, the conversion from drawback scheme to advance licence scheme is available to the appellants. Further, part of the consignment was under advance licence scheme and part of the consignment was under the drawback scheme and at the time of export, the consignment was examined by the Customs authorities as per advance licence scheme. Therefore, conversion can be allowed and cannot be denied on this premise only. Order is set aside - Decided in favor of assessee

Summary

Issues:
Appeal against denial of conversion of shipping bill from duty drawback scheme to advance licence scheme.

Analysis:
The appellants filed a shipping bill for export under advance licence cum duty drawback scheme but later requested conversion of part of the consignment to advance licence scheme. The denial was based on the fact that they had already benefited from the duty drawback scheme before making the request, and they were not entitled to conversion as per a specific Board Circular. The appellant argued that they were willing to repay the duty drawback claimed with interest and that their conversion request was not denied by relevant authorities. They contended that since part of the consignment was already under advance licence scheme, conversion should be allowed. The opposing party argued that the appellants cannot receive double benefits and that the export obligation under the advance licence had already been fulfilled.

The Tribunal considered the submissions and found that the appellants were willing to repay the duty drawback, making the denial on that ground unsustainable. They also noted that the Circular cited did not preclude conversion, as it was not denied by the relevant authorities. The Tribunal emphasized that part of the consignment was under advance licence, and all necessary examinations were conducted during export. Therefore, the conversion should not be denied solely on the basis of export obligations already fulfilled. The Tribunal set aside the impugned order and allowed the appeal, directing the authorities to process the conversion within a specified timeline in accordance with the Customs Act, 1962.

In conclusion, the Tribunal ruled in favor of the appellants, highlighting their willingness to repay the duty drawback and the lack of denial from relevant authorities for the conversion request. The Tribunal emphasized that the fulfillment of export obligations under the advance licence should not hinder the conversion process, as the Revenue would still recover the amount paid under the duty drawback scheme. The decision provided consequential relief to the appellants, instructing the authorities to facilitate the conversion process promptly.