2019 (11) TMI 736 - HC - Customs

Amendment in shipping bill - time limitation - request for conversion of free shipping bill to advance license shipping bill being rejected on the basis of time limit as prescribed by Circular No. 36/2010-Cus dated 23.09.2010 by the Adjudicating Authority - HELD THAT - Tribunal was not justified in adopting the approach that it did. Merely because no time limitation is prescribed under Section 149 for the purpose of seeking amendment/ conversion, it does not follow that a request in that regard could be made after passage of any length of time. The same could be made within a reasonable period. The conversion sought by the respondent was from free shipping bill to advance license shipping bill. The petitioner could not have entertained the application for such conversion without examination of the records. It was not fair to expect the Department to maintain, and be possessed of, the records after passage of five long years when the respondent made its application for such conversion. Appeal allowed.

Summary

Issues:
1. Interpretation of time limitation under Section 149 of the Customs Act for conversion of shipping bills.
2. Application of the principle of exercising jurisdiction within a reasonable period.
3. Consideration of relevant case laws in determining the reasonableness of the time period for conversion requests.

Analysis:
Issue 1: The main issue in this case was the interpretation of time limitation under Section 149 of the Customs Act for the conversion of shipping bills. The Customs, Excise & Service Tax Appellate Tribunal rejected the respondent's request for conversion of a free shipping bill to an advance license shipping bill based on Circular No.36/2010-Cus, which prescribed a three-month time limit. However, the Tribunal held that there was no specific time limitation under Section 149 of the Customs Act, leading to a dispute over the validity of the rejection.

Issue 2: The appellant argued that even though Section 149 does not prescribe a time limitation, the general rule of exercising jurisdiction within a reasonable period should apply. This argument was supported by the decision in State of Punjab Vs. Bhatinda District Co-Op. Milk P. Union Ltd., emphasizing the importance of determining a reasonable period based on the nature of the statute and relevant factors.

Issue 3: The court considered various case laws, including Diamond Engg. (Chennai) Pvt. Ltd. Vs. Commissioner of Customs and Parle Products Pvt. Ltd. Vs. Commissioner of Customs II Nhava Sheva, cited by the Tribunal. Furthermore, the court referred to Terra Films Pvt. Ltd. Vs. Commissioner of Customs and Anil Sharma Vs. Union of India, highlighting the significance of maintaining records and the challenges associated with processing conversion requests after a significant lapse of time.

The High Court ultimately held that while Section 149 does not specify a time limit for conversion requests, such requests should be made within a reasonable period. In this case, the respondent's request for conversion after five years was deemed unreasonable, considering the practical challenges faced by the Department in maintaining records for such a prolonged duration. Therefore, the impugned order was set aside, and the appeal was allowed in favor of the Commissioner of Customs.