2020 (1) TMI 165 - AT - Customs

Conversion of shipping bills - conversion of free shipping bills under scheme Code 00 to Export Promotion Capital Goods Scheme (EPCG) under scheme Code 11 - conversion denied in terms of Circular No. 36/2010 dated 23.09.2010 - the contention of the Respondent Department is that the departmental officers are bound by the Circular issued by the Department - HELD THAT - The sanctity of such Circulars was examined by the Hon ble Supreme Court in the case of BENGAL IRON CORPORATION VERSUS COMMERCIAL TAX OFFICER 1993 (4) TMI 277 - SUPREME COURT , where it was held that Law is what is declared by this Court and the High Court - to wit, it is for this Court and the High Court to declare what does a particular provision of statute say, and not for the executive. Of course, the Parliament/Legislature never speaks or explains what does a provision enacted by it mean. An identical issue has come up for consideration before the coordinate bench of this Tribunal in case of M/s Indian Oil Corporation Limited vs. Commissioner of Customs 2019 (11) TMI 1338 - CESTAT CHENNAI where it was held that the request for conversion of the shipping bill cannot be disallowed by pressing into the application of time limit prescribed by the Board in its circular dated 23.9.2010. The impugned order cannot be sustained and is being set aside - The appeal is allowed by way of remand to the original adjudicating authority for conversion of free shipping bills to EPCG shipping bill.

Summary

Issues Involved:

1. Conversion of free shipping bills to Export Promotion Capital Goods (EPCG) scheme shipping bills.
2. Applicability of Section 149 of the Customs Act, 1962.
3. Time limit for filing an application for amendment of shipping bills.
4. Validity and binding nature of CBEC Circular No. 36/2010-Customs.
5. Sufficiency of documentary evidence for conversion.
6. Precedent decisions on similar issues.

Issue-wise Detailed Analysis:

1. Conversion of free shipping bills to EPCG scheme shipping bills:
The appellant requested the conversion of fourteen shipping bills from free shipping bills under scheme Code 00 to EPCG under scheme Code 11. The Commissioner of Customs denied this request based on Circular No. 36/2010 dated 23.09.2010, which states that free shipping bills are subject to 'nil' examination norms and should not be converted to EPCG scheme shipping bills.

2. Applicability of Section 149 of the Customs Act, 1962:
The appellant argued that Section 149 allows for the amendment of any document presented before the Custom House by the importer/exporter, even after the goods have been cleared or exported, provided the amendment is based on documents that were in existence at the time of export. The Commissioner, being the proper officer, has the power to allow such amendments.

3. Time limit for filing an application for amendment of shipping bills:
The Commissioner denied the request for conversion as it was not made within the prescribed period of three months from the date of the Let Export Order (LEO). The appellant contended that Section 149 does not prescribe any time limit for applying for amendments, and the CBEC cannot impose such a limit through a circular.

4. Validity and binding nature of CBEC Circular No. 36/2010-Customs:
The appellant argued that circulars issued by the CBEC represent the department's understanding of statutory provisions and are not binding on courts or quasi-judicial authorities. The Supreme Court in Bengal Iron Corporation vs. Commercial Tax Officer held that such circulars are not binding on courts and quasi-judicial authorities.

5. Sufficiency of documentary evidence for conversion:
The appellant provided various documents, including the EPCG license, installation certificate, and invoices, which were in existence at the time of filing the shipping bills. These documents were intended to prove that the exported goods were produced using the imported machinery under the EPCG scheme.

6. Precedent decisions on similar issues:
The appellant cited several decisions where it was held that there is no time limit for filing an application for amendment of shipping bills, provided the amendment is based on documents that were in existence at the time of export. The Tribunal in Indian Oil Corporation Limited vs. Commissioner of Customs AIR held that the time limit specified in the CBEC circular cannot be applied to deny the request for conversion of shipping bills.

Judgment:
The Tribunal considered the rival contentions, the precedent decisions, and the documentary evidence provided by the appellant. It concluded that the impugned order could not be sustained and set it aside. The appeal was allowed by way of remand to the original adjudicating authority for the conversion of free shipping bills to EPCG shipping bills. The appellant was directed to provide all necessary documents to prove their claim for exports made under free shipping bills. This exercise was to be completed within three months from the receipt of the order.