2013 (9) TMI 285 - AT - Customs

Application for conversion assesse seeks for conversion of shipping bills from DFRC scheme to DEPB scheme Held that - The request of the assesse for conversion of the shipping bill to DEPB scheme was justifiable and it cannot be said that the circular issued by the Board in 2004 bars the claim of the assesse The description of the goods exported was exactly the same as mentioned in the DEPB schedule - In the case of DFRC scheme the assesse was required to give technical characteristics of the material used by them so that the replenishment of those materials used by importation could be allowed the Board had issued circular in 2010 which had further liberalized such conversions - the policy was designed to encourage the exports - in the facts and circumstances of the case a liberal view was called for. Period of limitation Held that - The application had to be considered on merits - In view of the Police report it cannot be said that there was five year delay in filing application Decided in favor of assesse.

Summary

Issues:
1. Delay in filing application for conversion from DFRC scheme to DEPB scheme.
2. Allegations of fraud, mis-declaration, and manipulation in obtaining DFRC licenses.
3. Interpretation of conditions for conversion under the Circular issued by the Board.

Analysis:

1. The appellant's application for conversion from the DFRC scheme to the DEPB scheme was initially rejected due to a perceived delay in filing the application. The Circular No. 4/2004-Cus stipulates that such applications must be made within one month of denial or rejection of the claim. However, the appellant cited the loss of original shipping bills in 2005 as the reason for the delay. The Commissioner noted discrepancies in the shipping bill numbers mentioned in the FIR and those claimed for conversion. Upon verification, it was found that the shipping bills in question were indeed covered by the certificate provided. The Tribunal accepted the appellant's explanation, ruling that the application was not delayed as it was impossible to file without the necessary documents, thereby aligning with the decision in the case of Midex Global Pvt. Limited.

2. The rejection of the application was also based on allegations of fraud and mis-declaration by the appellant in obtaining the DFRC licenses. The Jt. DGFT had accused the appellant of submitting false Chartered Engineer certificates, leading to the cancellation of the DFRCs. However, the Tribunal found that the rejection was not due to false certificates but rather the lack of customs endorsement on technical characteristics. The Tribunal highlighted that the Jt. DGFT had directed the appellant to approach Customs for endorsement, indicating no conclusive finding of fraud or mis-declaration. The Tribunal concluded that the appellant's actions did not amount to fraud, aligning with the submissions made by the appellant's counsel.

3. The final issue revolved around the interpretation of conditions for conversion under the Circular issued by the Board. The Commissioner had emphasized the requirement of no fraud or manipulation for conversion, citing specific paragraphs of the cancellation order. However, the Tribunal noted that the description of the exported goods matched the DEPB schedule, indicating eligibility for conversion. The Tribunal emphasized the policy objective of encouraging exports and considered the liberalized circular issued in 2010, ultimately allowing the conversion of shipping bills to the DEPB scheme in the appellant's favor.

In conclusion, the Tribunal allowed the appeal, granting the conversion of the shipping bills from the DFRC scheme to the DEPB scheme, emphasizing the importance of considering the circumstances of the case and the overarching goal of promoting exports.