2018 (10) TMI 770 - AT - Customs

Conversion of Shipping Bills - conversion of free shipping bills to drawback shipping bills - duty drawback - Held that - There is no controversy on the factum of export. That there can be a substitution of goods does not appear to be probable considering that the shipment has been made in liquid bulk carrier and was not concealed from the sight of the officers of customs or the master of the vessel. The circular of 2004, and the subsequent circular of 2010, clarifies that there is no requirement of conversion of shipping bills through the amendment process envisaged under section 149 of Customs Act, 1962 for allowing drawback. The circumstances of lack of awareness of the existence of a drawback rate owing to the liberalization in the export of molasses after January 2007 has not been taken into account. It would also appear that the Commissioner has not established the appellant to have indulged in misrepresentation in the shipment. The decision of Commissioner of Customs declining the post-export inclusion of particulars pertinent for sanction of drawback enumerated in rule 12 of the Customs, Central Excise Duties and Service Tax Rules, 1995 is set aside - appeal disposed off.

Summary

Issues:
1. Rejection of application for exercise of discretion under rule 12 of the Customs & Central Excise Duties and Service Tax Drawback Rules, 1995.
2. Eligibility for duty drawback on export of 'molasses'.
3. Compliance with remand order of the Tribunal regarding conversion of shipping bills.
4. Exercise of discretion by Commissioner of Customs in considering lack of awareness and misrepresentation.

Analysis:

1. The case involved the rejection of an application by M/s Midex Global Pvt Ltd for the exercise of discretion under rule 12 of the Customs & Central Excise Duties and Service Tax Drawback Rules, 1995. The initial rejection was based on the Commissioner of Customs' decision that sufficient cause had not been shown for the resort to discretion under the said Rules.

2. The appellant contended that 'molasses' had been banned for export until January 2007, and they were unaware of the eligibility for duty drawback thereafter, leading to the filing of free shipping bills. The eligibility for duty drawback was not disputed, and the appellant argued that the circulars issued by the Central Board of Excise and Customs supported their claim for drawback even when exported against free shipping bills.

3. The Tribunal noted that the goods were indeed exported, and 'molasses' were eligible for drawback at the appropriate rate. The Commissioner of Customs had complied with the remand order, but the Tribunal found that the lack of awareness regarding the drawback rate post-January 2007 was not considered. The Tribunal also observed that there was no evidence of misrepresentation in the shipment.

4. Ultimately, the Tribunal set aside the decision of the Commissioner of Customs and directed the inclusion of relevant details necessary for the sanction of drawback as per rule 12 of the Customs, Central Excise Duties and Service Tax Rules, 1995. The Commissioner was instructed to allow the incorporation of such details and refer the shipping bills to the competent authority for a decision on the entitlement to drawback. The appeal was disposed of accordingly.