2021 (2) TMI 261 - HC - Customs

Benefit of conversion from Drawback scheme to DFIA scheme - applicability of benefit at any time for the clearances which had taken place almost four years back - benefit on exports made in past after the period of 3 months are over from the date of such export - requirement of fulfilment of Circular No. 36/2010 Cus dated 23.09.2010 or not, as regards time limitation - HELD THAT - It appears from the materials on record that the respondents herein preferred an application addressed to the Principal Commissioner Customs, Mundra for conversion of 204 shipping bills from Drawback Scheme to Duty Free Import Authorization (DFIA) Scheme. The request came to be rejected by the Principal Commissioner Customs on the ground that the same was time barred. The Principal Commissioner Customs took the view that such a request was made for conversion after three months from the date of the Let Expert Order (LEO) and if such a request is accepted, the same would be contrary to the Circular No.36/2010 Cus dated 23.09.2010. In appeal by the respondents before the tribunal, the tribunal took notice of section 149 of the Customs Act, 1962. The tribunal noticed that no time limit has been prescribed under the statutory provision of Section 149 of the Act. In such circumstances, the Circular cannot prescribe particular time period, which is otherwise not provided in a statute - From Section 149 of Customs Act, it is clear that no time limit is prescribed. The request of the appellant for conversion was rejected on the sole ground of limitation as prescribed under Board Circular No.36/2010 Cus. It is found that since the time limit has not been prescribed under the act, the same cannot be fixed by way of the circular. Therefore, if at all there is a time limit by way of circular, it is only procedural requirement. Therefore, on this ground of limitation, application could not have been rejected, particularly when circular prescribing time limit is without authority of any statutory provision, act and rules supported. It is settled law that the time limit prescribed by the Board Circular is not binding as same is not statutory provision in terms of section 49 of the Customs Act 1962 - further, in the identical case of Bectors Food Specialities Ltd. (Supra) this Tribunal, Chandigarh after considering the Hon'ble Gujarat High Court judgment in the case of ANIL SHARMA AND 1 VERSUS UNION OF INDIA AND 3 2017 (2) TMI 50 - GUJARAT HIGH COURT held that the assessee was entitled for conversion of shipping bill from DBK Scheme to DFIA Scheme. Thus, Section 149 is applicable at the relevant point of time - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal under Section 130 of the Custom Act, 1962 against the order of the Customs, Excise & Appellate Tribunal.
2. Questions of law proposed by the revenue for consideration.
3. Conversion from Drawback scheme to DFIA scheme after a time period.
4. Interpretation of Section 149 of the Customs Act, 1962.
5. Validity of Circular No.36/2010-Cus.
6. Tribunal's decision on conversion of shipping bills.
7. Legal entitlement for conversion of shipping bills.
8. Error in the tribunal's order and applicability of Section 149.

Analysis:

1. The appeal under Section 130 of the Custom Act, 1962 was filed by the revenue against the order of the Customs, Excise & Appellate Tribunal, Western Zonal Bench, Ahmedabad. The tribunal had allowed the appeal of the respondent against the order of the Principal Commissioner, Customs, Mundra, dated 24.07.2019. The revenue raised questions of law for consideration by the High Court.

2. The questions proposed by the revenue included the permissibility of conversion from Drawback scheme to DFIA scheme after a significant time lapse, the justification of the Tribunal's decision on conversion, the interpretation of Circular No.36/2010-Cus, and the applicability of previous judgments.

3. The issue of conversion from Drawback scheme to DFIA scheme arose when the respondents sought conversion of 204 shipping bills after a considerable time period. The Principal Commissioner rejected the request as time-barred, citing Circular No.36/2010-Cus. The Tribunal, however, observed that Section 149 of the Customs Act, 1962 does not prescribe a time limit, and Circular provisions cannot override statutory provisions.

4. The interpretation of Section 149 of the Customs Act, 1962 was crucial in determining the permissibility of conversion. The Tribunal held that since no time limit is specified in the Act, the Circular's time limit was merely a procedural requirement and not legally binding. The Tribunal referred to previous judgments to support its decision.

5. The validity of Circular No.36/2010-Cus was questioned regarding its imposition of a time limit for conversion. The Tribunal emphasized that Circular provisions cannot impose restrictions not supported by statutory provisions. The Tribunal's decision was based on the absence of a statutory time limit.

6. The Tribunal's decision on the conversion of shipping bills from Drawback to DFIA scheme was in favor of the respondents. The Tribunal held that the appellant was legally entitled to the conversion, as no statutory time limit existed. The Tribunal directed the Commissioner to issue the necessary certificates for the conversion.

7. The Tribunal found no error in its decision and dismissed the appeal, citing the applicability of Section 149 at the relevant time. The High Court upheld the Tribunal's decision, stating that the questions proposed by the revenue did not raise substantial questions of law, as the issue was settled by previous court decisions.

8. The High Court dismissed the appeal, concluding that no error of law was committed by the Tribunal. The connected Civil Application was also disposed of accordingly, following the dismissal of the appeal.