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2014 (8) TMI 772 - AT - CustomsEXIM - Shipping bill - Conversion from Advance Licence to DEPB Scheme - Request made after more than one year of export - Request rejected on the ground that Circular No. 36/2010-Cus., dated 23-9-2010 permitted conversion within three months from the date of Let Export order and no documentary evidence produced by the exporter which existed at the time of export to support the request - whether the appellant s application for conversion of Shipping Bills from DFIA to Drawback scheme needs to be allowed or otherwise, when such application filed on 20-07-2013 is made after the goods have been exported, no imports are made against such DFIA and cancellation of such DFIA on 10-07-2013 by DGFT - Held that - Circular being beneficiary in nature, issued consequently to a number of Tribunal s decisions holding that amendment of shipping bill after export is governed by proviso to Section 149 of Customs Act, 1962, which prescribes no time-limit for such conversion and if the documentary evidence available at the time of export is produced such conversion needs to be allowed - appellant s exports are not in any dispute as regards description, quality, quantity, value, BRC etc., having no import against DFIA the substantial benefit on such exports now available need not be denied - Following decision of Diamond Engg. (Chennai) P. Ltd vs CC 2013 (3) TMI 46 - CESTAT CHENNAI - Decided in favour of assessee.
Issues Involved:
1. Whether the appellant's application for conversion of Shipping Bills from DFIA to Drawback scheme needs to be allowed when such application is made after the goods have been exported and the DFIA has been canceled. Issue-wise Detailed Analysis: 1. Application for Conversion of Shipping Bills: The appellant, M/s V.R.A. Cotton Mills Pvt. Ltd., filed an appeal against the rejection of their request for conversion of Shipping Bills from DFIA to Drawback scheme. The request was rejected by the Commissioner of Customs (Prev), Jamnagar, on the ground that it was not made within three months from the date of the Let Export Order (LEO), as stipulated by CBEC Circular No. 36/2010-Cus., dated 23-9-2010. 2. Factual Background: The appellant is an exporter who applied for DFIA to DGFT, which issued DFIA No. 0510306798 dated 31.10.2011 with an export obligation of Rs. 25 crores. The appellant exported ten consignments of Raw Cotton under DFIA shipping Bills but could not fulfill the export obligation. Consequently, the appellant requested the DGFT for cancellation of the DFIA, which was granted on 10-07-2013. Subsequently, the appellant requested the conversion of Shipping Bills from DFIA to Drawback scheme on 20-07-2013, which was rejected due to the delay beyond three months from the LEO date. 3. Appellant's Arguments: The appellant argued that: - The documents like contracts, Test analysis reports by Cotton Association of India, and other relevant documents were available and indicated that the goods exported were Indian Raw Cotton Shankar-6 of CTH 5201. - Under DFIA, the appellant had benefits of about 1.5%, whereas under the Drawback scheme, the benefit was only 1%. - The Cotton Association of India, an independent analytical laboratory, had analyzed the consignments, confirming the goods as Indian Raw Cotton Shankar-6 of CTH 5201. - The Hon'ble High Court of Mumbai in Repro India Ltd - 2009 (235) ELT 614 (Bom.) established that the intention of the Government is to export goods, not taxes. - Substantial benefits should not be denied due to procedural aspects. - The Commissioner is empowered to condone non-observance of provisions of Rule 12 and allow drawback. - Section 149 of the Customs Act, 1962 permits amendment of shipping bills based on documentary evidence existing at the time of export. 4. Respondent's Arguments: The respondent argued that: - Section 149 of the Customs Act, 1962 does not envisage conversion of Shipping Bills from one export promotion scheme to another. - The appellant had not justified the conversion request made after three months of LEO. - The appellant had filed Shipping Bills under the DFIA scheme and was not eligible for conversion to the Drawback scheme after three months of LEO. 5. Tribunal's Findings: The Tribunal found that: - There was no dispute on the facts of the case. The appellant had exported the goods under DFIA Shipping Bills and had not made any imports under the DFIA, which was subsequently canceled. - The provisions of Para 4.28(e) of HBP Vol-I 2009-14 allow cancellation of DFIA when no imports are made and permit the exporter to apply for conversion to the Drawback scheme without a specified time limit. - Rule 12(1)(a) of the Drawback Rules and Section 149 of the Customs Act, 1962 empower the Commissioner to allow amendments or conversions of Shipping Bills based on documentary evidence existing at the time of export. - The appellant's submission of non-observance of Rule 12(1) of the Drawback Rules was beyond their control due to the quota exhaustion for exports to China. - The Hon'ble High Court of Mumbai in Repro India Ltd established that the intention is to export goods, not taxes, supporting the appellant's case for conversion. - The relied-upon decisions and circulars indicate that conversion should be allowed if documentary evidence supports the request, even after the export. 6. Conclusion: The Tribunal concluded that the appellant's request for conversion of Shipping Bills from DFIA to Drawback scheme should be allowed. The impugned order was set aside, and the lower authorities were directed to convert the DFIA Shipping Bills to Drawback Shipping Bills. The eligibility and quantum of drawback would be decided by the appropriate customs authorities in accordance with the law. 7. Final Judgment: The appeal was allowed with consequential benefits under the Drawback scheme, as available in this case. The judgment was pronounced in court on 01.08.2014.
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