2013 (8) TMI 431 - AT - Customs

Amendment in the Shipping bills - In the shipping bills assesse did not file any declaration for claiming the export incentive they subsequently filed an application with DGFT for duty credit entitlement towards VKGUY Scheme under Chapter 3 of the Foreign Trade Policy 2004-2009 along with all the relevant information - Whether the declaration required to be made in terms of exports after 31.5.08 can be allowed to be made subsequent to the export of the goods. Difference of opinion - matter referred to larger bench to decide the following question - Whether it is proper to make amendments in the shipping bills to include the declaration as desired by the respondent as recorded by Judicial Member? or Whether it is proper to refuse such amendments as held by the Technical Member?

Summary

Issues Involved:
1. Whether the amendments in the shipping bills to include the declaration as desired by the respondent are permissible.
2. Whether the absence of the declaration at the time of export is a fatal defect to the claim for benefits under the VKGUY scheme.

Issue-wise Detailed Analysis:

1. Permissibility of Amendments in Shipping Bills:

The respondents filed 155 shipping bills from 1.6.2008 to 16.3.2009 for the export of 'Cutch Block (Acacia Catechu)' without any declaration for claiming export incentives. They later applied for duty credit entitlement under the VKGUY Scheme but faced objections due to the absence of the required declaration on the shipping bills as per para 3.23.8 of the Hand Book of Procedure.

The adjudicating authority rejected the request for making the declaration under Section 149 of the Customs Act, stating it would introduce a new fact not present at the time of export. However, the Commissioner (Appeals) allowed the amendment, noting that the benefit of the VKGUY scheme was denied solely due to the absence of the declaration, despite the export being eligible for the benefit.

The Revenue's contention was that Section 149 allows amendments only based on documentary evidence existing at the time of export. The Tribunal found no merit in this contention, stating that Section 149 allows amendments based on existing documentary evidence and does not render the provision futile. The Tribunal upheld the Commissioner (Appeals)'s decision to allow the declaration to be made post-export.

2. Absence of Declaration as a Fatal Defect:

The Assistant Commissioner refused to incorporate the declaration, leading to an appeal. The Commissioner (Appeals) ordered the amendments, prompting the Revenue to appeal to the Tribunal.

Section 149 of the Customs Act allows amendments to documents post-presentation at the customs house, provided they are based on documentary evidence existing at the time of export. The Tribunal noted that amendments before export are typically allowed, but post-export amendments require circumspection and should correct errors evident from existing documents.

The Tribunal highlighted that the declaration sought to be incorporated was in future tense on past shipping bills, which is inconsistent with common sense and Section 149. The shipping bills were initially filed as "Free Shipping Bills" without claims for export benefits, and customs authorities did not conduct special examinations for export incentives.

The Tribunal emphasized that the DGFT, responsible for granting VKGUY benefits, should decide if the absence of the declaration is fatal. Customs authorities cannot be forced to amend shipping bills to include claims not present at the time of export. The Tribunal concluded that the issue of curing the absence of the declaration and granting the incentive should be decided as a whole by the DGFT.

The Tribunal also referred to CBEC Circular No. 04/2004-Cus, which discourages conversion of free shipping bills into those claiming export benefits post-export. The Tribunal noted that the practice of incorporating changes in declarations post-export should be consistent with the objectives and risks involved.

The Tribunal found the facts of this case similar to the Delhi High Court decision in Terra Fills Pvt Ltd Vs. CC-2011 (268) ELT 483 (Del), where higher levels of checks are required for shipping bills claiming benefits. The Tribunal concluded that the appeal by Revenue should be allowed, setting aside the Commissioner (Appeals)'s order.

Separate Judgment:

The Judicial Member and Technical Member delivered separate judgments. The Judicial Member supported allowing the amendments, while the Technical Member opposed it, citing the need for higher checks for export incentive claims and adherence to Section 149.

Conclusion:

The Tribunal resolved the difference in opinion by referring the matter to the President of CESTAT for appropriate steps. The key issue is whether amendments to include declarations post-export are permissible and whether the absence of the declaration is a fatal defect to the claim for VKGUY benefits.