2015 (2) TMI 780 - AT - Customs

Post shipment amendment under section 149 of the Customs Act,1962- Rejection in Amendment in Shipping Bill- Focus Product Scheme - Reward Scheme Shipping Bills- Held that - In Circular No. 6/02-Cus dated 23.1.2002, which provides for exemption norms for export goods at port of export and in para 2.1(A) in respect of Factory Stuffed Export Cargo regarding the Scale of Examination, it is mentioned that no examination except (a) where the seals are found tampered with, or (b) there is specific intelligence in which case, permission of Deputy/Assistant Commissioner would be required before checking. Further, in para 2.2, it is provided that in all cases in respect of consignment selected for examination, a minimum of two packages with a minimum of 5% of packages (subject to a maximum of 20 packages from a consignment) shall be opened for examination will be selected by the system. Relating to the inspection report and invoices, the appellant states that in respect of both the export consignment 70 and 45 cartons were opened which being 10% of total number of cartons in each consignment, and the same are much more than maximum number of cartons (20) prescribed under the Board s Circular. Having considered the rival contentions and considering the documents on record, I find that the reason given in the impugned order upholding rejection of conversion of shipping bill under Section 149 is extraneous and is also perverse on the basis of information available on record. It is evident that the goods for export have been examined by the Customs official, who have examined 10% of the consignment and the cartons examined are much more than prescribed no. of cartons i.e. 20. Further, the containers were stuffed and sealed in the presence of the Customs Officer, thus, I hold that the reason for rejection of conversion of bill is bad. Decided in favour of appellant.

Summary

Issues:
1. Post-shipment amendment under Section 149 of the Customs Act, 1962 for conversion of free Shipping Bills to 'Reward Scheme Shipping Bills'.
2. Interpretation of Board Circular No. 36/2010-Cus and Circular No. 1/2009 regarding conversion of shipping bills.
3. Applicability of Section 149 of the Customs Act for amendment of shipping bills.
4. Compliance with conditions for availing incentives under Chapter 3 of the Foreign Trade Policy.
5. Comparison with previous tribunal rulings on conversion of shipping bills.

Analysis:

1. The appellant sought post-shipment amendment under Section 149 of the Customs Act for converting free Shipping Bills to 'Reward Scheme Shipping Bills' based on DGFT requirements. The adjudicating authority initially disallowed the amendment.

2. The Commissioner (Appeals) rejected the appeal citing Board Circular No. 36/2010-Cus, which prohibits conversion of free shipping bills into EP scheme shipping bills. The appellant argued that examination norms were not followed as required by Circular No. 1/2009, leading to rejection of the amendment.

3. The appellant contended that Section 149 allows document amendments based on existing evidence at the time of clearance or export. Documents presented included shipping bills, invoices, and certificates from the Banker regarding export realization, supporting the claim for incentive under Chapter 3 of the Foreign Trade Policy.

4. The appellant highlighted the recent requirement of mentioning Foreign Trade Policy entitlement on shipping bills, which they were unable to do initially. The appellant approached Customs authorities for endorsement based on existing documents, complying with Circular No. 6/02-Cus and conditions for conversion as per CBE&C Circular dated 23.9.2010.

5. The Revenue relied on past tribunal rulings to support the rejection of conversion requests for similar cases. However, the Tribunal found the reasons for rejection in the impugned order to be unfounded and based on incorrect information. The Tribunal ruled in favor of the appellant, directing Customs to convert the shipping bill promptly for DGFT compliance.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision on each aspect of the case, addressing legal provisions, circular interpretations, compliance requirements, and past rulings for a thorough examination of the matter.