2007 (12) TMI 81 - AT - Customs

Conversion of DEEC Shipping Bills into Drawback Shipping Bills rejected by the Commissioner - clause 3(d) of Circular 74/97 not fulfilled - Advance Licence remained unutilized as no imports were made under that - therefore, the conversion of shipping bills from the Advance Licence scheme to Drawback Scheme will not result in availment of double benefit for the same export, is not by itself sufficient to hold that the conversion is to be granted.

Summary

Issues:
Request for conversion of DEEC Shipping Bills into Drawback Shipping Bills.

Analysis:
The judgment deals with the rejection of the appellants' request for the conversion of DEEC Shipping Bills into Drawback Shipping Bills by the Commissioner of Customs. The appellants exported brass sanitary and bathroom fittings under the DEEC scheme and were granted an advance license. The request for conversion was made based on circulars and case law, but the Commissioner found that the conditions stipulated in Circular No. 74/97 and Circular No. 4/2004 were not fulfilled. The Commissioner's order highlighted various conditions that needed to be met for the conversion, such as surrender of the Advance Licence, examination of goods, and adherence to Drawback Rules.

The judgment discussed the specific requirements outlined in Circular No. 74/97, such as the need for cancellation or rejection letters from the DGFT, the involvement of supporting manufacturers, and the examination of goods. It was noted that the exporter in this case was a merchant exporter, not a manufacturer-exporter, which impacted the fulfillment of certain conditions. The judgment emphasized the importance of satisfying the conditions for availing benefits and proving eligibility for conversion, which was found lacking in this case.

Regarding the case laws cited, the judgment differentiated the applicability of the Terai Overseas case and the Jindal Stainless Ltd. case, highlighting that they did not directly impact the current case. The judgment also analyzed Circular No. 4/2004, emphasizing the principle that double benefits should not be availed during conversion from one scheme to another. It was noted that the exporter's claim for conversion from the Advance Licensing Scheme to Drawback did not meet the necessary requirements, including the fulfillment of export obligations and examination norms under the Drawback Rules.

Ultimately, the Vice-President upheld the impugned order rejecting the appeal, as the appellants failed to satisfy the conditions outlined in the circulars and regulations for the conversion of DEEC Shipping Bills into Drawback Shipping Bills. The judgment highlighted the importance of compliance with the specified criteria and regulations to prevent the availing of double benefits and ensure the integrity of the export schemes.