2016 (1) TMI 511 - AT - Customs

Conversion of free shipping bills to drawback shipping bills - The appellants claimed that the goods exported under these two free shipping bills were the same goods which were imported by them vide BE dated 20.8.2009. The Assistant Commissioner rejected the request, both under Section 149 of the Customs Act, 1962 and under Section 154 of the Customs Act, 1962. - Circular 4/2004 and 36/2010 - Held that - Revenue has power to convert the free shipping bill to drawback shipping bill, subject to the necessary safeguards under section 74, under Section 149 of the Customs Act. It is seen from the Order-in-Original and the impugned order that there has been no attempt to establish the identity of goods. Neither the appellant have approached the Commissioner for establishment of identity of goods or for relaxation of conditions prescribed under Re-export of Imported Goods (Drawback of Customs Duty) Rules, 1995, nor the adjudicating authorities have examined that aspect. The appeal is partially allowed in so far as it is clarified that Revenue has the power for conversion of free shipping bill to drawback shipping bill subject to the establishment of identity. The conditions laid down in the various circulars cited above regarding time limits etc. are waived. The order is set aside and the matter is remanded to the original adjudicating authority for examination on above lines. - Decided partly in favor of appellant.

Summary

Issues involved:
- Conversion of free shipping bills to drawback shipping bills under Customs Act, 1962.
- Interpretation of Circular 4/2004 and Circular 36/2010.
- Application of Section 149 and Section 154 of the Customs Act.
- Examination of legal provisions facilitating conversion.
- Relevance of Rule 12(1)(a) of Customs & Central Excise Drawback Rules.
- Identification of exported goods for claiming drawback under Section 74.

Analysis:

The judgment concerns the appeal of M/s Air India regarding the conversion of certain items exported under free shipping bills to drawback shipping bills. The Assistant Commissioner rejected the conversion request based on Circular 4/2004, which advised against such conversions. The Commissioner (Appeals) upheld this decision, citing the need for approaching the Commissioner under Rule 12(1)(a) of the Customs, Central Excise Duty Drawback Rules.

The appellant argued that Section 149 of the Customs Act specifically covers the conversion issue and highlighted the modification in Circular 36/2010, which allows conversion on a case-to-case basis subject to certain conditions. The appellant also invoked Section 154 for correcting the accidental filing of free shipping bills. Various legal citations were presented to support their arguments.

The Assistant Commissioner's decision was challenged on the grounds that the Rules referred to by the Commissioner (Appeals) were incorrect, as the drawback was sought under Section 74 of the Customs Act. The appellant emphasized the identification of imported goods through documentation and fulfillment of drawback conditions.

The respondent relied on specific rules governing drawback claims under Section 74, emphasizing the need for identifying exported goods and comparing them with imported goods. They highlighted the different examination levels for goods under free shipping bills and the requirement for physical examination for drawback claims over a certain amount.

The Tribunal analyzed the arguments and concluded that the Revenue has the power to convert free shipping bills to drawback shipping bills, subject to establishing the identity of goods. The judgment partially allowed the appeal, waiving certain conditions from the circulars and remanding the matter for further examination by the adjudicating authority to establish the identity of goods to the satisfaction of the Commissioner.