2017 (11) TMI 1537 - HC - Customs

Conversion of shipping bills - Section 149 of the Customs Act 1962 - CBEC Circular No.36/2010 Customs dated 23/9/2010 - Held that - It is not in dispute that the respondent is a manufacturer and exporter of Human Rabies Vaccine. The Tribunal has recorded a finding that fault lied with the EDI system. The Board Circulars are issued to ensure that standard operating system is followed. Here is a case where, technical error had crept in the computer system, which prevented generation of shipping bills - there is no infirmity in the impugned order passed by the Tribunal. The order under challenge is based on appreciation of facts and no substantial question of law arises for consideration - appeal dismissed - decided against appellant.

Summary

Issues:
1. Challenge to the Tribunal's final order by the Revenue.
2. Conversion of free shipping bills into DEEC shipping bills.
3. Technical problems in the Indian Custom EDI System.
4. Tribunal's decision based on fault in the EDI system.
5. Consideration of standard operating procedures and Board Circulars.
6. Inferring no substantial question of law for consideration.
7. Dismissal of the appeal and liberty granted to the respondent for further submissions.

Analysis:

1. The Revenue challenged the Tribunal's final order questioning the conversion of free shipping bills into DEEC shipping bills. The primary issue was whether the Tribunal's decision was correct in light of the Customs Act and relevant circulars. The key question was whether the conversion was permissible under the circumstances.

2. The respondent, engaged in manufacturing Human Rabies Vaccine, faced technical difficulties in the Indian Custom EDI System, preventing the generation of export promotion shipping bills. Despite filing DEEC declarations and supporting documents, the system issues led to the export being done under 'free shipping bills,' which later required conversion.

3. The Tribunal, citing past decisions, found in favor of the respondent, attributing the fault to the EDI system's technical error. The Tribunal directed the authorities to accept the request for conversion based on the available documents and declarations at the time of export, emphasizing the system's failure.

4. The High Court upheld the Tribunal's decision, noting the technical fault in the EDI system and the respondent's compliance with the export obligations. The Court emphasized the importance of following standard operating procedures and Board Circulars to ensure proper functioning, acknowledging the exceptional circumstances in this case.

5. The Court concluded that there was no legal flaw in the Tribunal's order, as it was based on a factual analysis of the situation. No substantial question of law was found to warrant further consideration, leading to the dismissal of the Revenue's appeal.

6. The appeal was dismissed, granting the respondent liberty to present additional materials supporting their claim before the relevant authority as directed by the Tribunal. The Court disposed of incidental matters and made no order as to costs, concluding the judgment.