2023 (4) TMI 836 - AT - Customs

Rejection of request of the IOC for conversion of DEEC Shipping Bills to Drawback Scheme - delay on the ground of delay and lack of documentary evidence. Time Limitation u/s 149 of CA - HELD THAT - The relaxation in granting conversion under the present circular No 36/2010 was provided only because of the representation made to the Board and keeping in view the various decisions of the Tribunal that amendment to shipping bill after export of goods is governed by the proviso to Section 149 of the Customs Act, 1962 and if the requirements of the said proviso are satisfied, conversion of shipping bill should be allowed. Accordingly, it was clarified that conversion may be permitted in accordance with the provisions of section 149 of the Customs Act on a case to case basis on merits provided the Commissioner of Customs is satisfied on the basis of documentary evidence which was in existence at the time the goods were exported to ascertain that goods were eligible for the export promotion scheme to which conversion has been requested. The conversion was then made subject to certain other conditions, primarily the time limit to make the application for conversion, within a period of three months from the date of Let Export Order (LET) - The conditions enshrined in the circular would definitely enable the department to achieve the objective to avoid duplicacy of the benefit which would prejudice the revenue. If the request / application seeking conversion is made within a specified period, it would enable the department to verify the claim diligently and promptly as also the availability of the documents. In the present case as noted by the adjudicating authority there has been delay of nearly 6 months to 1 year which is beyond the permissible time limit and for which no reason have been stated by the appellant. The next condition under the circular is regarding the satisfaction of the Commissioner of Customs on the basis of the documentary evidence as without it, it would not be feasible for the department to verify the claim for conversion. As is evident from the circular, the specific requirement is that the documents must show the use of the inputs in the resultant export product, fact of export and the fulfilment of the conditions of the export promotion scheme is satisfactorily proved. The sole object is to avoid duplicity of the benefit under both the schemes - In the present case, the adjudicating authority has specifically observed that the applications made are lacking supporting documents copies of Shipping Bills, Export Invoices, Airway Bill and Advance Authorizations / Licenses. The appeal filed by the Appellant was barred by time and was rightly rejected by the competent authority and also for the reason for non-filing of the requisite documents in terms of Section 149 of the Customs Act as well as the Circular. Appeal dismissed.

Summary

Issues Involved:
1. Conversion of DEEC Shipping Bills to Drawback Scheme.
2. Application of Section 149 of the Customs Act, 1962.
3. Time limit and documentary evidence requirements as per CBEC's Circular No. 36/2010-Cus dated 23.09.2010.

Summary:

1. Conversion of DEEC Shipping Bills to Drawback Scheme:
The appellant, M/s Indian Oil Corporation (IOC), challenged the order of the Commissioner Custom, Air Cargo Export dated 18.6.2012, which rejected their request for conversion of DEEC Shipping Bills to Drawback Scheme.

2. Application of Section 149 of the Customs Act, 1962:
IOC argued that Section 149 of the Customs Act does not prescribe any time limit for amendment of shipping bills, thus the 3-month period specified in the CBEC Circular is beyond the scope of Section 149. The Tribunal examined Section 149, which allows amendments based on documentary evidence existing at the time of export, and found that conversion from one scheme to another is not a mere amendment but a change in the status and character of documents, requiring verification of goods and documents at the time of export.

3. Time limit and documentary evidence requirements as per CBEC's Circular No. 36/2010-Cus dated 23.09.2010:
The Tribunal noted that the CBEC Circular No. 36/2010 allows conversion of shipping bills within three months from the Let Export Order (LEO) date, provided documentary evidence is available. The Tribunal found that IOC's applications were time-barred and lacked necessary supporting documents, such as copies of Shipping Bills, Export Invoices, and Advance Authorizations. The Tribunal emphasized that the circular's conditions are mandatory to prevent fraud and ensure administrative efficiency. The Tribunal also highlighted that the circular, being a subordinate legislation, can prescribe time limits and conditions for conversion requests.

Conclusion:
The Tribunal dismissed the appeal, holding that the decision of the Delhi High Court in M/s Terra Films Pvt. Ltd., which is binding on the Tribunal, supports the rejection of IOC's request due to the delay and lack of requisite documents. The appeal was found to be barred by time and non-compliance with the conditions stipulated in Section 149 of the Customs Act and the CBEC Circular.