2017 (5) TMI 321 - AT - Customs

Conversion of shipping bills - free shipping bills to drawback shipping bills - export of Maida - duty drawback on packing material - the said product was packed in Polypropylene (PP) bags - Held that - It would be wrong to deny due duty benefits to a genuine exporter - Since it is not possible to ascertain the weight of the packing material exported, it will not be possible to grant drawback claim which is based on the weight of the packing material - it is apparent that it is not possible to correlate the purchase documents of HDPE/woven bags , with the description of PP sacks appearing in the export invoices. In the absence of correlation it is not possible to consider conversion of free shipping bills to drawback shipping bills - appeal dismissed - decided against appellant.

Summary

Issues:
Request for conversion of free shipping bills to drawback shipping bills.

Analysis:
The appeal involved a request for converting free shipping bills to drawback shipping bills by M/s Gujarat Ambuja Exports. The appellants exported Maida (Wheat Flour) packed in Polypropylene (PP) bags without claiming any export incentive under dutiable shipping bills. They sought to claim the benefit of Central Excise paid on packing materials used for export goods through drawback. The Tribunal had remanded the matter to the Commissioner to allow the appellants to establish the correlation between the packing material purchased and the material used for packing export goods. However, the Commissioner, in the remand proceeding, again rejected the application for conversion, leading the appellants to approach the Tribunal.

The appellants argued that conversion to various schemes like DEPB and DEEC is permissible under the law and should be allowed to genuine exporters. They contended that the weight of packing material used for export could be determined from the difference between gross and net weight in export documents. They also presented invoices to support their claim of purchasing the packing material. On the other hand, the Revenue argued that efforts to link the packing material between exported and purchased goods were inconclusive, making it difficult to ascertain the weight and nature of the packing material used.

The Tribunal acknowledged the importance of granting due duty benefits to genuine exporters but emphasized the need for exporters to follow due process of law. It noted that the export documents indicated the use of PP bags for packing Maida, with a discrepancy in the description of packing material between purchase invoices and export documents. The Tribunal found a lack of correlation between the purchase invoices of 'HDPE/woven bags' and the description of 'PP sacks' in the export invoices. Additionally, it highlighted that the purchase of woven bags was by numbers, not by weight, further complicating the correlation. Consequently, due to the absence of correlation and inability to determine the weight of the packing material exported, the Tribunal dismissed the appeal for conversion of free shipping bills to drawback shipping bills.

In conclusion, the Tribunal's decision was based on the inability to establish a clear correlation between the purchased packing material and the material used for export, leading to the dismissal of the appeal for conversion. The judgment underscored the importance of adhering to legal procedures and providing conclusive evidence to support claims for duty benefits in export transactions.