2006 (5) TMI 36 - AT - Customs

Customs EXIM Policy Request for conversion of shipping bill into advance licence bills before goods have been exported to be considered under section 149 of the Customs Act, 1962 after giving the party a reasonable opportunity of being heard.

Summary

Issues:
1. Refusal of conversion of "Free" Shipping Bills to "Advance Licence" Shipping Bills.
2. Nature of impugned proceedings - quasi-judicial or administrative.
3. Maintainability of the appeal against an Assistant Commissioner's letter.
4. Interpretation of Section 149 of the Customs Act regarding the amendment of export documents.

Issue 1 - Refusal of Conversion:
The appellants, manufacturers and exporters of Sodium Silicate, imported raw materials under an Advance Licence and exported their final product towards fulfilling export obligations. The dispute arose when they sought to convert "Free" Shipping Bills to "DEEC" Scheme Shipping Bills, which was declined by the Commissioner of Customs. The appellants argued that the refusal violated natural justice and cited relevant case laws supporting their plea. The Tribunal found that the Commissioner's decision not to permit conversion adversely affected the party and set aside the decision, directing the Commissioner to reconsider the application in accordance with the law.

Issue 2 - Nature of Proceedings:
The appellants contended that the impugned proceedings were quasi-judicial and should be set aside due to the negation of natural justice. The Tribunal agreed with this argument, emphasizing that the Commissioner was expected to discharge a quasi-judicial function while dealing with the party's application. The Tribunal found the proceedings in violation of natural justice and remanded the case to the Commissioner for a fresh decision, highlighting the need for a reasonable opportunity for the party to be heard.

Issue 3 - Maintainability of Appeal:
An objection was raised against the maintainability of the appeal, arguing that it was against an Assistant Commissioner's letter and not permissible before the Tribunal. The Tribunal overruled this objection, stating that the grievance was essentially against the Commissioner's decision communicated through the Assistant Commissioner's letter, which adversely affected the party. Therefore, the appeal was deemed maintainable.

Issue 4 - Interpretation of Section 149:
The Tribunal analyzed Section 149 of the Customs Act, which allows for the amendment of export documents under specific conditions. It noted that the proviso to Section 149 permits amendments if documentary evidence existing at the time of export supports the claim. The Tribunal found that in the present case, the necessary documentary evidence for amendment was available during the exports under the DEEC Scheme. The Tribunal concluded that the Commissioner's decision and the Board's Circular overlooked this crucial provision, leading to the setting aside of the impugned proceedings and a direction for a fresh decision by the Commissioner.

In conclusion, the Tribunal allowed the appeal, emphasizing the importance of adhering to legal provisions, principles of natural justice, and the quasi-judicial nature of decision-making in such matters.