2015 (11) TMI 1154 - AT - Customs

Conversion of Bill of Exports from DFIA to Drawback - request for conversion was rejected on the basis of Circular No.13/10 of Customs dated 23/9/2010 wherein it is stated that the request has to be made within three months from the date of Let Export Order - Held that - Commissioner is empowered to allow drawback on shipping bills which may not contain any of these details. The provisions of Rule 12 (1) of custom and Central Excise Duties Drawback Rule, 1995 empowers the Commissioner to condone non-observance of provisions of Rule 12 and allow Drawback. This is nothing but an amendment or conversion of shipping bill filed. The circular issued by the Board goes beyond the Rules as section 149 of the Customs Act clearly permits amendment of shipping bills without any such time limit even after export of goods. All these submissions have been considered in detail by the CESTAT in the above said case. In these circumstances, I do not think that Commissioner is justified in not following the decision rendered in the appellant s own case 2014 (8) TMI 772 - CESTAT AHMEDABAD - Decided in favour of assessee.

Summary

Issues:
- Duty Free Import Authorization (DFIA) conversion to Drawback rejection based on Circular No.13/10 of Customs dated 23/9/2010
- Applicability of previous CESTAT judgment favoring the appellant
- Allegations of improper declaration on shipping bills and denial of DFIA benefit

Analysis:

1. The appellant, an exporter of raw cotton, applied for a DFIA license with an export obligation of Rs. 25 crores. Due to market conditions, the appellant could not fulfill the export obligation after exporting to Pakistan. Subsequently, the appellant requested cancellation of DFIA, which was approved by DGFT. The appellant then sought conversion of DFIA to Drawback, which was rejected by the Commissioner citing Circular No.13/10, requiring requests within three months of Let Export Order (LEO).

2. The appellant argued that a previous CESTAT judgment in their favor should be applied, as it involved a similar situation where DFIA was canceled due to non-fulfillment of export obligations. The Commissioner contended that the previous judgment was not applicable, as the exports were to China and on a quota basis. Additionally, the department had appealed the previous judgment before the High Court.

3. The Commissioner alleged that the appellant's request for DFIA cancellation was due to incomplete export documentation, implying improper declaration on shipping bills. However, the appellant argued that all documents were in order and pointed out the provisions of Rule 12 (1) of the Drawback Rules, empowering the Commissioner to allow drawback even if shipping bills lack certain details. The appellant contended that the Commissioner's assumption of improper declaration lacked evidence.

4. The Tribunal analyzed the previous judgment and found that the rejection of the request for conversion to Drawback was unjustified, as per the principles established in the appellant's earlier case. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The Tribunal emphasized that the Commissioner should have considered the appellant's submissions and followed the previous decision in the appellant's favor.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the importance of following precedents and considering the specific circumstances of each case when making decisions regarding DFIA conversion to Drawback.