2022 (1) TMI 364 - AT - Customs

Request for amendment of EDI shipping bill - delay of 9 to 12 months from date of filing of shipping bills - original authority has declined to amend the shipping bills because the EGM has already been closed and it is not possible to amend the shipping bill thereafter in the EDI system - valid ground to deny amendment under section 149 or not - HELD THAT - Section 149 states the officer may, in his discretion, permit amendments and it does not say the officer shall permit amendment. If the legislative intent was to make amendment a vested right, then there was no need for permission from anyone. Not only is the word used is May and not Shall , but it is followed by the words in his discretion . The only limitation on the discretion of the officer is the proviso which states that it shall not be permitted except on the basis of the documentary evidence before the export. Subject to this limitation, the officer, indeed, has the discretion which he can exercise and permit or not permit amendments to the shipping bill. The exporter or importer has, as a corollary, the right to seek an amendment under section 149 but nothing in the section suggests that the importer or exporter has a right to an amendment. Otherwise, the words the officer may, in his discretion in Section 149 will be otiose. Needless to say that once an officer makes a decision, such a decision will be subject to judicial review. When discretion is given to an administrative or quasi-judicial authority, can he decide in any manner he pleases or is it subject to any restrictions? - HELD THAT - The officers exercised discretion to NOT permit amendments for any reason other than the fact that the EGM was closed and therefore, the amendment cannot be done in the Customs EDI system. The other reasons argued by the learned Departmental Representative such as the Shipping Bill was subjected to less rigorous examination because it indicated that no benefits were being claimed in the column and that this amounts to changing the nature of the scheme under which the goods are exported are not mentioned in either the order-in-original or in the impugned order. Hence, these reasons cannot be accepted while deciding this appeal. Whether the reason given for not permitting amendment of the Shipping Bill can be sustained? - HELD THAT - The appellant has made out a strong case for getting the Shipping Bills amended because its intention to claim the benefit was evident on the face of each Shipping Bill. Only an entry was made NO instead of marking YES and this should not deprive the appellant of its substantive benefit. The reason for not allowing the amendment is that the EGM was closed which may be valid reason for not being able to make the amendment in the EDI system, but is not a valid reason for not allowing amendment under Section 149. Whether Customs officers should be directed to transmit the Shipping Bills to the DGFT? - HELD THAT - The request before the original authority and the appeal before the Commissioner (Appeals) were only with respect to permitting amendments in the Shipping Bills. This issue has also not been urged at the time of hearing of this appeal and is, therefore, not being decided. The appeal is partly allowed by only directing the Respondents to permit amendment of the shipping bills either in the Customs EDI system or manually, as may be feasible - appeal allowed in part.

Summary

Issues Involved:
1. Amendment of Shipping Bills under Section 149 of the Customs Act.
2. Discretion of the proper officer in permitting amendments.
3. Impact of the closure of Export General Manifest (EGM) on amendments.
4. Procedural versus substantive benefits under the Merchandise Exports Incentive Scheme (MEIS).

Detailed Analysis:

1. Amendment of Shipping Bills under Section 149 of the Customs Act:
The appellant filed 15 Shipping Bills for export, indicating an intent to claim rewards under MEIS but mistakenly marked ‘NO’ in the “SCHEME REWARD” column. The appellant later requested an amendment under Section 149 of the Customs Act to correct this error. Section 149 allows amendments based on documentary evidence existing at the time of export. The Additional Commissioner and Commissioner (Appeals) rejected the request, citing the closure of the EGM.

2. Discretion of the Proper Officer in Permitting Amendments:
Section 149 states that the proper officer "may, in his discretion, permit" amendments, indicating that the officer has the discretion but not the obligation to allow changes. The Tribunal emphasized that discretion must be exercised judiciously and not arbitrarily. The officer’s decision is subject to judicial review to ensure it is not arbitrary or unreasonable.

3. Impact of the Closure of Export General Manifest (EGM) on Amendments:
The primary reason for rejecting the amendment was the closure of the EGM, which supposedly made amendments in the Customs EDI system impossible. The Tribunal found this reason insufficient, stating that the software's limitations should not prevent legally permissible amendments. If electronic amendments are not feasible, manual amendments should be allowed.

4. Procedural versus Substantive Benefits under MEIS:
The appellant argued that the substantive benefit of MEIS should not be denied due to a procedural lapse (marking ‘NO’ instead of ‘YES’). The Tribunal agreed, noting that the appellant's intent to claim MEIS benefits was evident on the face of the Shipping Bills. The procedural error should not deprive the appellant of substantive benefits.

Conclusion:
The Tribunal set aside the impugned order and directed the respondents to permit the amendment of the shipping bills either electronically or manually, as feasible. The appeal was partly allowed, ensuring that the appellant's substantive rights under MEIS were upheld despite the procedural error.