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2017 (3) TMI 1012 - AT - CustomsConversion of shipping bills - drawback shipping bills into DFIA shipping bills - export of biscuits and assorted confectionary products - Held that - In the case in hand duty draw back benefit of shipping bill has not been granted till to-day, accordingly, the appellant has sought conversion of shipping bills. It is to be noted that para 3 of the Board s Circular 36/2010-Cus dated 23.09.2010 permit the Commissioner of Customs to allow the conversion of shipping bill from export promotion scheme to another schemes on case to case basis depending on the merits of the case - It is not the case of the department that duty draw back or DFIA is not export promotion scheme. The export has been made during the period 07.10.2014 to 26.06.2015 and the goods which are sought to be exported were examined in accordance with law for sanctioning of duty drawback, as any other export promotion scheme - the situation in the case in hand is covered straightly by the Board s Circular dated 23.09.2010 - the impugned order is unsustainable and liable to be set aside - lower authorities are directed to convert the drawback shipping bills to DFIA shipping bills. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Delay in sanctioning duty drawback claims. 2. Request for conversion of duty drawback shipping bills to DFIA scheme shipping bills. 3. Interpretation and application of Board's Circular No. 36/2010 dated 23.09.2010. 4. Legal provisions under Section 149 of the Customs Act, 1962 and para 2.56 of the Hand Book of Procedures. 5. Relevant case laws and precedents. Detailed Analysis: 1. Delay in Sanctioning Duty Drawback Claims: The appellant had exported goods and filed shipping bills claiming duty drawback for the period 07.10.2014 to 26.06.2015. The claims were not sanctioned but suspended for various reasons. The appellant contended that despite fulfilling the conditions for duty drawback, the benefits were not granted even after two years. 2. Request for Conversion of Duty Drawback Shipping Bills to DFIA Scheme Shipping Bills: Due to the delay in receiving duty drawback benefits, the appellant requested the conversion of duty drawback shipping bills to DFIA scheme shipping bills. The request was initially denied by the Asst. Commissioner (Drawback) citing that conversion should be done within three months from the date of Let Export Order as per Board's Circular No. 36/2010. The first appellate authority remitted the matter back to the Commissioner of Customs, who also rejected the conversion request after following due process. 3. Interpretation and Application of Board's Circular No. 36/2010 Dated 23.09.2010: The appellant argued that the three-month limit prescribed in the Circular is not mandatory, as held by the Hon'ble High Court of Kerala in Leotex India v. UOI 2012 (281) ELT 173 (Ker). The Circular permits the Commissioner of Customs to allow conversion on a case-to-case basis depending on the merits. The appellant held a valid DFIA license during the relevant period and fulfilled the conditions of the Circular. 4. Legal Provisions Under Section 149 of the Customs Act, 1962 and Para 2.56 of the Hand Book of Procedures: Section 149 of the Customs Act, 1962 allows for the amendment of shipping bills if the exporter has not availed the benefit of the export promotion scheme. Para 2.56 of the Hand Book of Procedures permits conversion of shipping bills if the benefit has not been availed. The appellant argued that there is no time limit fixed under these provisions for such amendments. 5. Relevant Case Laws and Precedents: The appellant relied on several judgments to support their case: - V.R.A. Cotton Mills Pvt. Ltd. 2014 (309) ELT 100 (Tri. Ahd): No time limit for conversion if the benefit has not been availed. - Fontansey Engg. Export Pvt. Ltd. 2008 (232) ELT 100: Conversion from one export scheme to another is allowed if the benefit has not been sanctioned. - JSW Ltd. 2006 (199) ELT 445 (T): Conversion of shipping bills provisionally assessed under one scheme to another is permissible. - Leotex India v. UOI 2012 (281) ELT 173 (Ker): The three-month limit in the Circular is not mandatory. The department argued that the application for conversion was made almost after 1.5 years, which is beyond the prescribed limit. They cited the judgments in CC v. Suzlon Energy Ltd. 2013 (2) ECS (28) (Mad-HC) and Terra Films Pvt. Ltd. to support their stance that conversion should be done within the prescribed time limit. Judgment: The Tribunal found that the appellant had not received any duty drawback benefits and was entitled to seek conversion of shipping bills. The Tribunal held that the provisions of Section 149 of the Customs Act, 1962 and para 2.56 of the Hand Book of Procedures do not prescribe a time limit for such amendments. The Board's Circular dated 23.09.2010 allows conversion on a case-to-case basis, and the appellant fulfilled the conditions for conversion. The Tribunal directed the lower authorities to convert the drawback shipping bills to DFIA shipping bills. Conclusion: The appeal was allowed, and the impugned order was set aside. The Tribunal directed the lower authorities to convert the duty drawback shipping bills to DFIA shipping bills, recognizing the appellant's entitlement to the conversion despite the delay in application. The Cross Objection filed by Revenue was also disposed of.
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