2021 (5) TMI 222 - HC - Customs

EPCG Scheme - Amendment in Shipping Bills - mention of the EPCG licence number on the shipping bill, mandatory or not - right to seek to explain, by virtue of other contemporaneous and supporting evidences, the factum of export - HELD THAT - No doubt requires the mention of both the name of the supporting manufacturer as well as the EPCG authorization number on the shipping bill and in this case both are absent. However, the requirements, though mandatory, are capable of being satisfied constructively as well and non-mention is not fatal to the claim of concessional rate of duty. The provisions of Section 149 of the Customs Act provides a forum to the petitioner to establish this by way of contemporaneous records. Thus, an opportunity must be extended to the petitioner to prove the factum of export through Glovis by way of supporting materials. The burden is, no doubt, heavy and it is for the petitioner to produce material before the authorities to discharge such burden. However such opportunity should be read into the provisions of para 5.7.1 to ensure that genuine and bonafide cases of supporting manufacturers are not denied the benefit of concessional duty. The impugned order is a non-speaking order that has not adverted to the justification put forth by the petitioner and is hence set aside - Petition allowed.

Summary

Issues involved:
1. Challenge to order rejecting amendment of shipping bills under EPCG Scheme.
2. Interpretation of mandatory requirements for mentioning EPCG license number on shipping bills.
3. Consideration of supporting evidence for export obligation satisfaction.
4. Validity of non-speaking order rejecting petitioner's claim.
5. Bank guarantee invocation pending EPCG Committee decision.

Analysis:
1. The petitioner challenged the order rejecting the amendment of its shipping bills under the Export Promotion Capital Goods (EPCG) Scheme. The petitioner sought to explain the non-mentioning of its EPCG numbers on the shipping bills due to exports being conducted through a third party, Glovis India Ltd. The Assessing Authority rejected the request without considering the petitioner's explanation, leading to the challenge in the High Court.

2. The legal issue revolved around whether the mention of the EPCG license number on shipping bills was mandatory. The court analyzed the relevant provisions of the FTP, specifically para 5.7.1 of the EPCG Scheme, which requires the endorsement of the EPCG authorization number on shipping bills for export obligation discharge. The court noted the absence of the license number on the shipping bills but opined that constructive satisfaction of requirements and supporting evidence could validate the claim for concessional duty.

3. The court emphasized the petitioner's opportunity to prove the export through Glovis with supporting materials, as mandated by Section 149 of the Customs Act. While acknowledging the burden on the petitioner to provide evidence, the court highlighted the need to ensure genuine cases of supporting manufacturers are not denied the benefit of concessional duty. The court directed the Commissioner of Customs to allow the petitioner to present evidence and pass a speaking order on the applications within a specified timeframe.

4. The court criticized the impugned non-speaking order for not considering the petitioner's justifications and set it aside. The court instructed the petitioner to appear before the Commissioner of Customs for a hearing without further notice and mandated a timely decision on the applications based on merits and presented evidence.

5. Regarding the bank guarantee issue, the court directed that the bank guarantee should not be invoked pending a decision by the Commissioner of Customs on the EPCG license matter. The court disposed of the related petition accordingly, with no costs imposed.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the court's rulings on each aspect of the case.