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2021 (6) TMI 1099 - HC - CustomsConversion of free shipping bills into Advance Licence/DEPB/DFRC/Drawback shipping bills - effective date that has to be taken into account in deciding the cut-off point when the unit in question would cease to be an Export Oriented Unit and assume status of a unit under the EPCG Scheme - the relevant date would be date of in-principle approval, being 10.04.2007 or final exit order, being 01.01.2008? - Rule 12 of the Customs and Central Excise Duties and Service Tax Drawback Rules, 1995 - HELD THAT - Rule 12 deals with the declarations to be made on shipping bills specifying the nature of the export transaction. In the present case, all shipping bills between April and end December, 2007 were free shipping bills for the reason that the petitioner had yet to receive the final order of exit. In any event, the proviso to Rule 12 states that the Commissioner of Customs, if satisfied that the exporter or authorised agent has failed to comply with Rule 12 for reasons beyond its control, might well exempt the exporter/authorised agent from the rigour of the clause. According to the petitioner, had the authorities taken it upon themselves to issue the final exit order well in time, then the petitioner would have ensured compliance with provisions of Rule 12 and there would have been no necessity to file free shipping bills as against EPCG bills. Though Rule 12 (1) clearly vests discretion in the Commissioner to grant exemption by way of duty drawback even in respect of free shipping bills, such discretion must be extended by way of a reasoned speaking order - neither of the impugned orders dated 09.08.2019 and 02.03.2020 satisfy this requirement. The Customs Act, 1962 is a central enactment and there must thus, be uniformity in the exercise of discretion by officers in different stations. If an officer in a particular station has thought it fit to accept an assessee s claim in an identical circumstance, then any variation from this point of view only be after a process of detailed reasoning to justify the difference in stand. The dichotomy in the stand adopted by the different authorities as well as the fact that there is no reasoning to support the conclusion in the impugned order, is fatal to the respondents case - impugned orders are set aside - petition disposed off.
Issues Involved:
1. Issuance of Writ of Certiorari for quashing communications dated 09.08.2019 and 02.03.2020. 2. Issuance of Writ of Mandamus directing the respondents to grant drawback for 207 shipping bills. 3. Determination of the effective date for the transition from Export Oriented Unit (EOU) to Export Promotion of Capital Goods Scheme (EPCG). 4. Validity of rejection of the petitioner’s request for conversion of EOU shipping bills to drawback shipping bills. 5. Uniformity in the exercise of discretion by different Customs authorities. Detailed Analysis: 1. Issuance of Writ of Certiorari for Quashing Communications: The petitioner sought the issuance of Writ of Certiorari to quash the communications dated 09.08.2019 and 02.03.2020. The court noted that the basis for rejection was the reference to para 6.18 (e) of the Foreign Trade Policy, 2004-2009, which stated that the unit would continue to be treated as per its original status until the final exit order was passed by the Development Commissioner on 01.01.2008. The court found that the impugned orders did not satisfy the requirement of a reasoned speaking order and thus set them aside. 2. Issuance of Writ of Mandamus for Granting Drawback: The petitioner sought a Writ of Mandamus directing the respondents to grant drawback for 207 shipping bills amounting to Rs.5,86,23,750/-. The court observed that the petitioner had been diligent in adhering to the procedures stipulated for exiting the EOU Scheme and entering the EPCG Scheme. The court directed the authorities to reconsider the petitioner’s claim for drawback and pass detailed orders reflecting due application of mind to all submissions of the petitioner. 3. Determination of Effective Date for Transition from EOU to EPCG: The court examined whether the relevant date for the transition from EOU to EPCG should be the date of in-principle approval (10.04.2007) or the final exit order (01.01.2008). The respondents argued that the petitioner would continue to hold the status of EOU between 10.04.2007 and 31.12.2007, as the no-due certificate was issued only on 06.12.2007. The court found that the petitioner had paid all applicable duties by 23.11.2007 and that the final exit order was a formality. The court directed the authorities to reconsider the effective date in light of the petitioner’s compliance with the necessary procedures. 4. Validity of Rejection of Request for Conversion of EOU Shipping Bills: The petitioner’s request for conversion of EOU shipping bills to drawback shipping bills was initially rejected by the Technical Officer (Drawback) on 05.05.2009. The court noted that Circular No.4/2004-Cus., dated 16.01.2004, allowed for the conversion of shipping bills from one export promotion scheme to another, subject to specified conditions. The court found that the petitioner’s entitlement to conversion was not in dispute and that the authorities had failed to provide a reasoned decision for rejecting the request. The court set aside the impugned orders and directed the authorities to reconsider the petitioner’s request. 5. Uniformity in Exercise of Discretion by Different Customs Authorities: The court highlighted the need for uniformity in the exercise of discretion by Customs authorities in different stations. The court observed that the Assistant Commissioner of Customs (Export), Tuticorin, had accepted the petitioner’s claim in an identical circumstance, while the Commissioner of Customs (Airport) had rejected it. The court found that the lack of reasoning to support the differing conclusions was fatal to the respondents’ case. The court directed that a consistent and unified approach be taken by the Commissionerates in reconsidering the petitioner’s claim. Conclusion: The court set aside the impugned orders dated 09.08.2019 and 02.03.2020 and directed the authorities to reconsider the petitioner’s claim for drawback and the effective date for the transition from EOU to EPCG. The court emphasized the need for uniformity in the exercise of discretion by different Customs authorities and directed that detailed orders be passed reflecting due application of mind to all submissions of the petitioner. The writ petitions were disposed of in the aforesaid terms, with no costs, and connected miscellaneous petitions were closed.
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