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2018 (8) TMI 1977 - AT - CustomsConversion of Shipping Bills - DEEC Scheme to Duty Draw Back Scheme - Circular No. 04/2004-Cus. dated 16.01.2004 - HELD THAT - It is found that the shipping bills no. 9201344 dated 23.06.2003 and 9207688 dated 07.08.2003 for which the conversion were sought for by the appellant, are not related with the export consignment of M/s Karan exports, FSEZ against which DRI, KZU reported adversely. Conversion of shipping bills from one export incentive scheme to another export incentive scheme has been allowed by Ministry of Finance after having sufficient and elaborate exercise in the Chief Commissioners Conference on Tariff and allied matters held on 26.09.2003. The guidelines that were published earlier in the form of Circular No.06/2003-Cus dated 28.01.2003, 40/2003-Cus dated 12/05/2003 had been amended with Circular 04/2004-Cus dated 16/01/2004. Appeal allowed - decided in favor of appellant.
Issues:
- Disallowance of conversion of Shipping Bills from DEEC Scheme to Duty Draw Back Scheme - Mis-use of Advance License and imposition of fiscal penalty - Adjudication Order cancellation of Advance License - Request for conversion disallowed by Commissioner (Airport & Administration) - Appeal against disallowance of conversion Issue 1: Disallowance of conversion of Shipping Bills from DEEC Scheme to Duty Draw Back Scheme: The appeal was filed against the disallowance of the conversion of two Shipping Bills from DEEC Scheme to Duty Draw Back Scheme by the Commissioner (Airport & Administration), Kolkata. The appellant, M/s Scandia Investment Pvt. Ltd., had obtained an Advance License under DEEC Scheme and exported goods under this scheme. Subsequently, they applied for the conversion of these Shipping Bills to the Duty Draw Back Scheme, which was disallowed by the Commissioner citing failure to fulfill all stipulated conditions. The appellant contended that the Shipping Bills in question were not related to the problematic export consignment, and all relevant documents were submitted. The Tribunal found that the Shipping Bills for conversion were not linked to the adverse export consignment, and based on the Board's Circular, conversion should have been allowed. Issue 2: Mis-use of Advance License and imposition of fiscal penalty: The Zonal Joint Director General of Foreign Trade had canceled the Advance License issued to the appellant and imposed a fiscal penalty for mis-use of the license. This decision was challenged by the appellant in the High Court, which remanded the matter for fresh adjudication. The Addl. Director General of Foreign Trade later set aside the earlier order, stating that the license had expired and could not be revalidated. The appellant then sought conversion of the Shipping Bills under the Duty Draw Back Scheme, which was disallowed by the Commissioner. The Tribunal considered the history of the license cancellation and the subsequent orders to assess the validity of the conversion request. Issue 3: Adjudication Order cancellation of Advance License: The cancellation of the Advance License by the Zonal Joint Director General of Foreign Trade was based on the mis-use of the license by the appellant. This decision was challenged by the appellant, leading to a series of adjudication orders and legal proceedings. The subsequent orders clarified the status of the license and the inability to revalidate it, which impacted the appellant's request for conversion of Shipping Bills. The Tribunal reviewed the entire sequence of events to determine the impact of the canceled license on the conversion request. Issue 4: Request for conversion disallowed by Commissioner (Airport & Administration): The Commissioner (Airport & Administration), Kolkata, disallowed the request for conversion of the Shipping Bills from DEEC to Duty Draw Back Scheme after issuing a Show Cause Notice. The decision was based on the failure to meet all conditions specified in the Ministry's guidelines for conversion. The appellant argued that the Shipping Bills in question were not linked to the problematic export consignment and that all relevant documents were submitted. The Tribunal examined the reasons for disallowance and the appellant's submissions to assess the correctness of the Commissioner's decision. Issue 5: Appeal against disallowance of conversion: The appeal was filed before the Appellate Tribunal challenging the disallowance of the conversion of Shipping Bills from DEEC Scheme to Duty Draw Back Scheme. The appellant's advocate argued that the Shipping Bills were unrelated to the export consignment under scrutiny and that all necessary documents were provided. The Revenue's representative supported the decision of the Adjudicating Authority. The Tribunal carefully considered the submissions, reviewed the appeal records, and concluded that the conversion should have been allowed based on the lack of connection between the Shipping Bills and the problematic export consignment. The Tribunal set aside the impugned order and allowed the appeal with consequential benefits, if any.
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