2022 (2) TMI 101 - AT - Customs

100% EOU - Conversion of free shipping bills filed under EOU scheme into drawback shipping bills - the request for conversion has been rejected without any sufficient grounds - section 149 of the Customs Act, 1962 - HELD THAT - As per provision of Section 149 of the Customs Act, 1962, if the documents evidencing the export of goods is produced, the request for conversion has to be considered by the officer. Though it is within the jurisdiction of the proper officer to allow the amendment of a free shipping bill, such discretion has to be applied as contained in section 149 of the Customs Act, 1962. The question as to whether appellant is eligible for the drawback benefits has to be considered only after the drawback shipping bills are presented for claim. If the claim of drawback is rejected an appeal against the rejection of drawback benefits has to be filed before the revisionary authority. In the present case, the request is only for conversion of free shipping bills in terms of section 149 of the Customs Act, 1962. It is not the case of the department that the appellant has not produced sufficient document to prove that the export of goods were done by them. So also there is no allegation that there is delay in filing the request for conversion. On such score, the request for conversion cannot be denied - there are no grounds to deny the conversion / amendment of shipping bills in terms of section 149 of the Customs Act, 1962. The eligibility of drawback has to be looked into by the concerned officer. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Rejection of request for conversion of free shipping bills filed under EOU scheme into drawback shipping bills.
2. Jurisdiction of the Tribunal in matters related to drawback benefits.
3. Application of Section 149 of the Customs Act, 1962 for amendment of shipping bills.
4. Eligibility for drawback benefits post conversion of shipping bills.

Detailed Analysis:

1. Rejection of request for conversion of free shipping bills filed under EOU scheme into drawback shipping bills:
The appellant, M/s. Summer India Textile Mills Pvt. Ltd., operating under the 100% EOU scheme, sought to convert 274 free shipping bills into drawback shipping bills. They argued that they had not availed any duty benefit or EOU benefit for the period from 1.2.2009 to 19.2.2010 and had filed all shipping bills under free shipping bills. Their request was initially rejected and, even after a remand for fresh decision, was again rejected by the Commissioner. The Tribunal found that the rejection was without sufficient grounds and allowed the appeal, emphasizing that the request for conversion should be considered under Section 149 of the Customs Act, 1962.

2. Jurisdiction of the Tribunal in matters related to drawback benefits:
The Tribunal clarified that it does not have jurisdiction to entertain appeals related to orders of drawback benefits. However, it can entertain appeals related to the rejection of conversion of free shipping bills under Section 149 of the Customs Act, 1962. The Tribunal's role was to determine whether the conversion request was valid, not to decide on the eligibility for drawback benefits.

3. Application of Section 149 of the Customs Act, 1962 for amendment of shipping bills:
Section 149 allows the proper officer to authorize amendments to documents, including shipping bills, based on documentary evidence existing at the time of export. The Tribunal noted that the appellant had produced sufficient documents to prove the export of goods and that there was no delay in filing the conversion request. Therefore, the Tribunal held that the request for conversion should not be denied, emphasizing that discretion under Section 149 must be applied appropriately.

4. Eligibility for drawback benefits post conversion of shipping bills:
The Tribunal made it clear that its decision to allow the conversion of free shipping bills to drawback shipping bills did not imply that the appellant was automatically eligible for drawback benefits. The eligibility for such benefits would need to be reconsidered by the appropriate officer after the conversion. The Tribunal only determined that there were no grounds to deny the conversion request under Section 149 of the Customs Act, 1962.

Conclusion:
The Tribunal set aside the impugned order rejecting the conversion request and allowed the appeal with consequential relief. The eligibility for drawback benefits would be assessed separately by the concerned officer. The decision was pronounced in open court on 01.02.2022.