2024 (3) TMI 1056 - AT - Customs

Conversion of shipping bills - conversion from Draw Back Scheme to Advance License Scheme - limitation period of three months for seeking conversion of shipping bills from one scheme to another - HELD THAT - It is seen from the findings of the learned Commissioner that he has given detailed findings while refusing conversion from Draw Back Scheme to Advance License Scheme at such belated stage even after same was availed by the appellants sometime after the exports was done. The order clearly discusses the scheme and legal provisions related thereto and how freely done conversion from one scheme to another after availing benefit can jeopardize revenue interest as both have their own procedural encompass and how conversion from less rigorous to more rigorous examination scheme was not permitted by the Circular No. 36/2010. This court also finds that Hon ble High Court in THE PRINCIPAL COMMISSIONER OF CUSTOMS, MUNDRA VERSUS M/S LYKIS LIMITED 2021 (2) TMI 261 - GUJARAT HIGH COURT after having a look at Circular No. 36/2010 dated 23.09.2010 struck down only the para 3(a) which had prescribed of three months limitation from the date of export order. This court finds validity of condition 3(e) of Circular No. 36/2010 dated 23.09.2010 survives and therefore holds that once a benefit under which shipping bill was filed has been availed, the conversion to any other scheme cannot be allowed. It is thus clear that the same has a bigger objective of atleast giving finality to some extent to decisions earlier taken while exporting, as is the case of the appellants in this matter. This court therefore, finds that once draw back benefit was availed then there was no scope for seeking conversion to any other scheme And in relation to mis-declaration clause in 3(e) above being disjunctive as in case later proposition of mis-declaration, manipulation etc., coming into play, the exporter even if has been precluded from availment can still be denied conversion. This court finds that matter falls within the ambit of para 3(e) of the above Circular and the conversion request after having enjoyed the benefit of draw back scheme, and after availing the same, cannot be allowed. Appeal dismissed.

Summary

Issues Involved:
1. Conversion of shipping bills from Drawback Scheme to Advance License Scheme.
2. Applicability and interpretation of Circular No. 36/2010-Cus dated 23.09.2010.
3. Timeliness of the conversion request.
4. Legal precedents cited by the appellant.

Summary of Judgment:

Conversion of Shipping Bills from Drawback Scheme to Advance License Scheme:
The appellants, exporters of P&P medicines, sought to convert 38 shipping bills filed under the Drawback Scheme to the Advance License Scheme. The request was made after availing the Drawback benefit and nearly two years post-export. The appellants argued for conversion by citing various precedents, including Nissan Exports vs CC Mundra, where amendments of shipping bills were allowed beyond the prescribed period.

Applicability and Interpretation of Circular No. 36/2010-Cus dated 23.09.2010:
The Circular No. 36/2010-Cus, particularly para 3, was scrutinized. It was noted that the Commissioner of Customs is the competent authority for such conversions u/s 149 of the Customs Act, 1962. The Circular allows conversion under specific conditions, including that the request must be made within three months from the Let Export Order (LEO) and that the exporter has not availed benefits under the original scheme.

Timeliness of the Conversion Request:
The court noted that the request for conversion was made long after the exports were completed and the Drawback benefits were availed. It was emphasized that even though para 3(a) of the Circular, which prescribed a three-month limitation, was struck down by the Hon'ble Gujarat High Court, para 3(e) remained valid. This clause prevents conversion if the exporter has already availed benefits under the original scheme.

Legal Precedents Cited by the Appellant:
The appellants cited several cases to support their plea for conversion. However, the court found that these cases primarily addressed the issue of time limitations for conversion and did not apply to situations where benefits under the original scheme were already availed. The court referred to the decision in Commissioner of Customs (Export) Vs. E.S. Lighting Technologies (P) Ltd., which held that requests for conversion should be made within a reasonable time.

Conclusion:
The court upheld the findings of the Commissioner, stating that allowing conversion from a less rigorous examination scheme (Drawback) to a more rigorous one (Advance License) would contravene statutory provisions. The appeal was dismissed as the appellants had already availed the Drawback benefits, making them ineligible for conversion under para 3(e) of Circular No. 36/2010-Cus. The judgment emphasized the importance of finality in export decisions and the binding nature of CBEC/CBIC circulars on the department.

(Pronounced in the open court on 22.03.2024)