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2016 (12) TMI 199 - AT - CustomsConversion of shipping bills - 189 free shipping bills to drawback shipping bills - Rule 12 (1) (a) of Drawback Rules - deliberate error made by appellant - request of conversion was made more than one year after the issue of Let Export Order - learned advocate relied in the decision of the case of CC Tuticorin Vs Thiru Arooran Sugars Ltd. 2014 (12) TMI 691 - MADRAS HIGH COURT - Held that - In the first place, it is noticed that the decisions of Hon ble High Court and Tribunal decisions cited by learned advocate relate to the Board s circular No.4/2004-Cus. dt. 16.1.2004. As such, I hold that they cannot be made applicable to the facts of the present case since thereafter Board vide Circular No.36/2010-Cus. dt. 23.9.2010, has taken note of series of judgements and accordingly guidelines had been issued for evaluating and decided upon the request for such conversion. From perusal of the circular, it emerges that Board has empowered the Commissioner of Customs to allow conversion of shipping bill from schemes involving from rigorous examination to schemes involving less rigorous examination (for example, free advance authorization, DFIA reward schemes to drawback/DEPB scheme or schemes involving same level of examination). However, it has been clearly laid down in the circular that since free shipping bills are subjected to NIL examination norms, conversion of free shipping bill into export promotion scheme shipping bill should not be allowed. At the same time, it has been clarified that, in the light of para-4 of the circular, the Commissioner may allow All Industry Rate of duty drawback on goods exported under free shipping bills without conversion of such free shipping bill to Drawback Scheme shipping bill. I find that in the impugned order, the lower authority has only considered the matter of conversion of free shipping bills to drawback shipping bills. However, the alternative allowance of All Industry Rate of duty of drawback on goods exported under free shipping bills without such conversion has not been considered by the lower authority. In the event, the matter is once again remanded to adjudicating authority to re-examine the matter - It is clarified that time bar provision will not apply in this matter - appeal allowed by way of remand.
Issues:
Request for conversion of free shipping bills to drawback shipping bills rejected by the Commissioner of Customs based on specific grounds. Analysis: The issue in dispute pertains to the rejection of the appellant's request for the conversion of 189 free shipping bills to drawback shipping bills. Initially, a Single Member Bench of the Tribunal had held that the appellant, being a manufacturer-exporter, is entitled to avail drawback. The matter was remanded for de novo consideration. In the subsequent proceedings, the Commissioner of Customs rejected the conversion request citing various reasons, including the absence of a declaration for drawback under Drawback Rules, 1995, and the timing of the request, which was made more than a year after the Let Export Order. The lower authority also noted that the exporter did not intend to apply for drawback at the time of export and that the filing of free shipping bills was not due to inadvertent error. The matter was brought before the Tribunal for appeal. The appellant's counsel argued that there is no limitation period for conversion requests and cited relevant court decisions supporting the conversion of shipping bills. On the other hand, the Revenue contended that conversion cannot be allowed without satisfying the documentary evidence requirements under Section 149 of the Customs Act, 1962. The Revenue emphasized that the examination norms for free shipping bills are less rigorous and conversion should be based on strict criteria. The Tribunal analyzed the circular issued by the Board, which clarified the norms for conversion of shipping bills. The circular allowed conversion from schemes involving different levels of examination but prohibited the conversion of free shipping bills into export promotion scheme shipping bills. It also permitted the allowance of duty drawback on goods exported under free shipping bills without conversion. The Tribunal noted that the lower authority had only considered the conversion issue and not the alternative option of duty drawback. Consequently, the Tribunal remanded the matter to the Adjudicating Authority for re-examination in light of the circular guidelines. The Authority was directed to provide a reasonable opportunity to the appellant, ensure a timely decision within three months, and pass a reasoned order. In conclusion, the Tribunal remanded the appeal to the Adjudicating Authority for further consideration in accordance with the Circular No. 36/2010-Cus. The Authority was instructed to consider the alternative option of duty drawback and provide a fair opportunity for the appellant to present their case within a specified timeframe.
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