2020 (10) TMI 1141 - HC - Customs

Advance Authorization Scheme - Doctrine of Estoppel - request for amendment of Bills of Lading - HELD THAT - For the purpose of issuance of No Objection, provisions of Section 149 of the Customs Act, 1962 envisage the complete procedure for issuance of no objection certificate, ie for the purpose of amendment of a bill of entry or a shipping bill only after fulfilling certain conditions in the proviso. It is trite law that circulars cannot assume the role of the Principal Act lest the provisions only a binding force. If at all the revenue is facing difficulties in accepting and processing applications for amendment of bills of lading, an amendment to the Principal Act can be suggested in accordance with law and till the pendency of the same, an Ordinance can also be issued. No such stand is taken as evident from Ext.P10 - the action of the respondent cannot be accepted, for, it is an utter violation of statutory provision of Section 149 of the Customs Act. Respondents are directed to issue no objection certification seeking amendment of the bill in accordance with law - Petition allowed.

Summary

Issues:
Challenge to rejection of request for issuance of No Objection letter for export obligations against advance authorisation.

Analysis:
The petitioner, an export-oriented company, challenged the rejection of the request for issuance of a No Objection letter by respondents 3 and 5 to consider three shipments for fulfilling export obligations against the advance authorization granted by the 4th respondent, the Joint Director General of Foreign Trade. The petitioner had imported frozen fish and other items for processing and export as per legal requirements. The petitioner faced a shortage of raw materials for processing, which were imported duty-free for the purpose of encouraging exports. Due to an inadvertent omission, the details of the advance authorization were not included in export documents, making the petitioner eligible only for duty drawback. The petitioner sought to rectify this by requesting the issuance of a No Objection letter to consider the shipments as fulfillment of export obligations. The rejection was based on a circular fixing a timeline for such applications, which the petitioner contended was arbitrary and contrary to statutory provisions.

The petitioner argued that the circular fixing a timeline for submission of applications for No Objection certificates was arbitrary and violated statutory provisions. The respondent contended that the circular had binding force and could not be challenged using the doctrine of estoppel. The court examined the provisions of Section 149 of the Customs Act, 1962, which outline the procedure for amending documents like bills of entry or shipping bills. The court noted that the respondent's rejection was based on a condition in the circular requiring requests for conversion to be made within three months from the Let Export Order (LEO). The court emphasized that circulars cannot replace the principal act and suggested that any difficulties faced by the revenue in processing such applications should be addressed through appropriate amendments to the law.

The court held that the respondent's action in rejecting the petitioner's application was a violation of statutory provisions under Section 149 of the Customs Act. The court quashed the impugned order and directed the respondents to issue a No Objection certificate for amending the bill in accordance with the law within one month from the date of the judgment. The court emphasized the importance of adhering to statutory provisions and ensuring that circulars do not override the law.