2024 (12) TMI 682 - AT - Customs

Conversion of Shipping Bills from NFEI to EOU/other schemes - Non-compliance with time limit for conversion request - request for conversion by the respondent was made after a period of three months - HELD THAT - It is an admitted fact that this conversion has no revenue implication since the conversion was allowed only on the ground that the respondent does not claim any export incentive schemes. The only ground taken by the Revenue is that the request for conversion was filed beyond three months and this issue is no more res integra as it is covered by various decisions of the Tribunal and the Hon ble High Court where such conversions were allowed even in cases where the request was filed beyond three months since the Section 149 of the Customs Act, 1962 does not specify any time limit. In the case of THE PRINCIPAL COMMISSIONER OF CUSTOMS, MUNDRA VERSUS M/S LYKIS LIMITED 2021 (2) TMI 261 - GUJARAT HIGH COURT , the Hon ble Gujarat High Court observed ' It is settled law that the time limit prescribed by the Board Circular is not binding as same is not statutory provision in terms of section 49 of the Customs Act, 1962.' The impugned order is upheld and the appeal filed by the Revenue is dismissed.

Summary

Issues:
1. Conversion of Shipping Bills from NFEI to EOU/other schemes.
2. Compliance with time limit for conversion request.

Analysis:
The appeal was filed by the Revenue against an Order-in-Original passed by the Principal Commissioner of Customs, Bangalore, allowing the conversion of 11 Shipping Bills from 'No Foreign Exchange Involved' (NFEI) to EOU/EPZ/SEZ/EHTP/STP schemes. The Revenue contended that the conversion request was made after the prescribed three-month period as per CBIC Circular No.36/2010. The respondent argued that the conversion was permissible under Section 149 of the Customs Act, 1962, as they had inadvertently mentioned NFEI. The respondent cited various tribunal and high court decisions supporting conversions beyond three months. The main issue was whether the Principal Commissioner rightly allowed the conversion despite the time limit contention raised by the Revenue.

The Tribunal examined the statutory provision of Section 149 of the Customs Act, 1962, which does not specify any time limit for amendments. Referring to the case of Principal Commissioner of Customs, Mundra vs. Lykis Ltd., the Tribunal emphasized that circular time limits are procedural requirements and not binding if not supported by statutory provisions. The Tribunal highlighted that the absence of a time limit in the Act allows for flexibility in allowing conversions beyond three months. Citing previous judgments, the Tribunal affirmed that the time limit prescribed by circulars is not mandatory and conversions can be permitted based on the statutory provision of Section 149.

In conclusion, the Tribunal upheld the impugned order allowing the conversion of Shipping Bills from NFEI to EOU/other schemes, dismissing the Revenue's appeal. The decision was based on the absence of a statutory time limit in Section 149 and the precedents supporting conversions even beyond three months. The judgment reaffirmed the flexibility in allowing such conversions based on statutory provisions rather than circular time limits.