2024 (4) TMI 1098 - AT - Customs

Rejection of request of the appellant for conversion of free shipping bills to drawback shipping bills - Section 149 of the Customs Act 1962 - HELD THAT - N/N. 39/2003-C.E.(N.T.) allows drawback on petroleum products. The appellant has exported petroleum products to M/s. Nepal Oil Corporation and hence they are eligible for the benefit of duty drawback as provided in the aforesaid Notification. The appellant could not claim the drawback benefit because they had not filed the drawback shipping bill at the time of export. The appellant has filed applications dated 12.08.2004 and 24.04.2007 requesting for conversion of their free shipping bills to drawback shipping bills. When their request was not considered they approached the Tribunal and this Tribunal vide Final Order No. FO/75188/2016 dated 17.02.2016 2016 (3) TMI 889 - CESTAT KOLKATA has categorically directed the adjudicating authority to allow the conversion of free shipping bill into drawback shipping bill subject to the satisfaction of the conditions stipulation in Section 149 of the Customs Act 1962. The Tribunal in the Final Order dated 17.02.2016 2016 (3) TMI 889 - CESTAT KOLKATA has categorically directed the proper officer to allow conversion of the free shipping bills to drawback shipping bills in terms of Section 149 of the Customs Act independent of the C.B.E.C. Circular dated 16.01.2004. It is observed that the ld. adjudicating authority in the impugned order has rejected their applications for conversion on the grounds which are not there in Section 149. Since the appellant has all the documents necessary for considering the amendment under Section 149 of the Act the impugned order denying the request for conversion of free shipping bills to drawback shipping bills is legally not sustainable. In view of the above the impugned order is set aside and the conversion of the free shipping bills to drawback shipping bills is allowed. The impugned order is set aside - appeal allowed.

Summary

Issues Involved:
1. Conversion of free shipping bills to drawback shipping bills u/s 149 of the Customs Act, 1962.
2. Compliance with Tribunal's direction in Final Order dated 17.02.2016.
3. Validity of grounds for denial by the adjudicating authority.

Summary:

1. Conversion of free shipping bills to drawback shipping bills u/s 149 of the Customs Act, 1962:
The appellant requested the conversion of free shipping bills to drawback shipping bills based on Notification No. 39/2003-Cus. dated June 19, 2003, which allowed drawback benefits for the export of petroleum products to M/s. Nepal Oil Corporation. The adjudicating authority denied the request, arguing that converting free shipping bills to drawback shipping bills would change the status and character of the documents, and that physical verification of the goods was necessary, which was not possible as the goods had already been exported.

2. Compliance with Tribunal's direction in Final Order dated 17.02.2016:
The Tribunal had previously directed the adjudicating authority to allow the conversion of free shipping bills to drawback shipping bills if the conditions stipulated in Section 149 of the Customs Act were met, independent of the CBEC Circular dated 16.01.2004. The appellant argued that the adjudicating authority's denial did not comply with this direction, as Section 149 permits amendment based on documentary evidence available at the time of export, without requiring physical verification of goods.

3. Validity of grounds for denial by the adjudicating authority:
The adjudicating authority's denial was based on several grounds, including the need for physical verification of goods and the assertion that the appellant had suppressed information. The appellant countered these points, stating that Section 149 does not require physical verification and that all necessary documents were available at the time of export. The Tribunal observed that the adjudicating authority's grounds for denial were not supported by Section 149 and set aside the impugned order, allowing the conversion of free shipping bills to drawback shipping bills.

Conclusion:
The Tribunal concluded that the appellant was entitled to the conversion of free shipping bills to drawback shipping bills as per Section 149 of the Customs Act, 1962. The adjudicating authority's denial was found to be legally unsustainable, and the appeal was allowed. The Tribunal emphasized that procedural issues should not deny substantive benefits that the appellant is otherwise entitled to.