2008 (2) TMI 249 - AT - Customs

Export of Soyabean Meal Extraction/Soyabean De-oiled Cake under shipping bills different clarifications by DGFT - appellant application for conversion of free shipping bills into DEPB shipping bills can t be denied by the authorities on the ground that at the time of export the clarification issued by the DGFT was against the appellant and the subsequent explanation was applicable prospectively and cannot be applied for consignment al ready exported conversion can t be denied

Summary

Issues:
Conversion of free shipping bills into DEPB shipping bills.

Detailed Analysis:
The appellant exported 'Soyabean Meal Extraction/Soyabean De-oiled Cake' under three shipping bills during 2000-2001. Initially, the DGFT clarified that the goods were not covered by the DEPB scheme. Subsequently, the DEPB Committee reconsidered and held that the goods were eligible for DEPB. The appellant sought conversion of free shipping bills into DEPB shipping bills, which was denied by the authorities citing the initial DGFT clarification against the appellant at the time of export. The subsequent clarification by the DEPB Committee was considered prospective and not applicable to already exported consignments.

The issue revolved around whether the exporter could be allowed to convert free shipping bills into DEPB shipping bills. The Board's Circular No. 40/2003-Cus permitted such conversion under specific conditions. It clarified that conversion could be allowed on a case-to-case basis if the exporter was forced to file free shipping bills due to denial of benefits by Customs or DGFT. The circular emphasized that no fraud or investigations should be initiated against the exporter regarding the exports under those shipping bills.

Considering the facts presented, it was evident that the appellants were compelled to file free shipping bills due to the DGFT's explanation. Therefore, they fell under the purview of the Board's circular allowing conversion. Additionally, judicial precedents, such as the Tribunal's decision in the case of Nucleus Satellite Communications Pvt. Ltd. v. CC (Seaport), Chennai, supported the conversion of shipping bills under similar circumstances. The Tribunal's decision highlighted that denying export incentives would defeat the objective of promoting exports.

Hence, the judgment concluded that there was no valid reason to deny the conversion of free shipping bills into DEPB shipping bills. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellants. The decision was pronounced in open court by the Member (J) of the Appellate Tribunal CESTAT, Ahmedabad, Ms. Archana Wadhwa.