2021 (8) TMI 991 - AT - Customs

Conversion of shipping bills from duty drawback scheme to advanced authorisation scheme - mistake in the shipping bills occurred - time limitation - HELD THAT - It is an undisputed fact that the appellant is a manufacturer and exporter of linen and silk fabrics since 1988 and there has not even a single remark or dispute either with the Customs Department or DGFT which has been approved by the respondent. Further, it is found that the mistake in the shipping bills occurred on account of change of the employee who was looking after the import and export of the appellant and as soon as the appellant came to know about the fact of filing of shipping bill under duty drawback in stead of advance authorisation scheme, they immediately reported to Deputy Commissioner seeking amendment of the shipping bill but the same was declined by the Principal Commissioner on the ground that there is a delay in filing the application and secondly export documents were not endorsed by the Customs officer and thirdly that the appellant has not been able to establish the foreign exchange receipt against these exports. Section 149 confers discretionary power to the proper officer to amend the document but that discretion has to be exercised judiciously in order to deliver justice to the parties who makes an application before him. Appellant has produced documents in Volume-I and volume-II along with appeal papers which clearly proves that the goods were exported and the bank realisation certificate are produced evidencing the proof of export to the developed countries like USA, UK, Germany where stringent export laws are followed. Time limitation - HELD THAT - The provision of Section 149 of the Customs Act, 1962 or the rules or notifications made thereunder does not provide any time limit for amendment or conversion of the documents and it is only through the circular issued by CBEC a period of three months have been prescribed. It has been consistently held by the Tribunal that the time limit prescribed by the CBEC is not binding on the court if the Circular is contrary to the statutory provision, then the statutory provision would prevail. The concerned Customs officer is directed to allow the amendment in the shipping bills but before that the appellant would pay back the duty drawback claimed by them along with interest which will be quantified by the Departmental officer and after the payment of the said amount, the concerned officer allow the amendment in the shipping bills as prayed by the appellant - Appeal allowed.

Issues Involved:
1. Conversion of shipping bills from duty drawback scheme to advanced authorisation scheme.
2. Compliance with principles of natural justice.
3. Discretionary power under Section 149 of the Customs Act, 1962.
4. Time limit for amendment of documents as prescribed by CBEC Circular.
5. Proof of export and endorsement by Customs officers.

Issue-wise Detailed Analysis:

1. Conversion of Shipping Bills:
The appellant, a manufacturer and exporter of linen and silk fabrics, requested the conversion of shipping bills from the duty drawback scheme to the advanced authorisation scheme. This request was initially rejected by the Principal Commissioner of Customs, Bangalore. The appellant argued that the mistake was inadvertent and due to an employee's error. The appellant had imported goods under advance authorisation licenses and exported them, mistakenly filing for duty drawback instead of under the advance authorisation scheme.

2. Compliance with Principles of Natural Justice:
The appellant contended that the rejection of their request was done without issuing a show-cause notice and without following the principles of natural justice. The appellant emphasized their clean track record since 1988 and argued that the Customs department should have exercised their discretionary power under Section 149 of the Customs Act, 1962, to allow the amendment of the shipping bills.

3. Discretionary Power under Section 149 of the Customs Act, 1962:
Section 149 confers discretionary power to the proper officer to authorize amendments to documents, provided such amendments are based on documentary evidence existing at the time the goods were cleared, deposited, or exported. The appellant argued that this discretion should be exercised judiciously to deliver justice. The Tribunal found that the appellant had provided sufficient documentary evidence, including bank realization certificates and proof of export, to support their claim for amendment.

4. Time Limit for Amendment of Documents as Prescribed by CBEC Circular:
The appellant argued that the provisions of Section 149 or the rules/notifications issued thereunder do not prescribe any time limit for amendment/conversion of documents. They contended that the time limit prescribed by the CBEC Circular cannot override statutory provisions. The Tribunal agreed, citing several decisions where the time limit prescribed by the CBEC was not considered binding if contrary to statutory provisions.

5. Proof of Export and Endorsement by Customs Officers:
The appellant provided documentary evidence, including shipping bills endorsed by the Customs department, invoices, and bank realization certificates, proving that the goods were exported. The Tribunal found that the appellant had established proof of export and that the Customs department's observation regarding the lack of physical examination and endorsement on the shipping bills was misplaced. The Tribunal noted that the appellant had only claimed a small amount of duty drawback compared to the duty foregone on the imported goods, indicating no intent to misuse the provisions.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal and directing the concerned Customs officer to permit the amendment of the shipping bills after the appellant repays the claimed duty drawback along with interest. The Tribunal emphasized the need for a judicious exercise of discretionary power under Section 149 and recognized the appellant's clean track record and the inadvertent nature of the mistake.

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