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2022 (7) TMI 1449 - HC - CustomsRebate claim - claim of benefit of scheme called Rebate of State and Central Taxes and Levies in respect of 70 shipping bills generated for the export - HELD THAT - It appears that when the goods were exported, Scheme Code 19 was inadvertently indicated while filling up the details in the system electronically. The stand is evidently too technical and pedantic. In exercise of powers under Section 157 read with Section 46 of the Customs Act, 1962, the Central Board of Excise and Customs have made regulation, namely Bill of Entry (Electronic Integrated Declaration) Regulations, 2011. Bill of Entry is defined under Regulation 2(c) whereas Regulation 3 says that authorised person may enter electronic integrated declaration in the Indian Customs Electronic Data Interchange System (EDI system) by himself through ICEGATE or by way of data entry through the service centre by furnishing the particulars. It was based on the above requirement that the authorities have been taking a stand that since wrong code was entered in the electronic data interchange system, the petitioner could not be given the benefit of Rebate Scheme. The entitlement of the petitioner for availment under export scheme is not in dispute. Entering a particular code to receive the benefit was only part of procedure. It could not overreach or obliterate the substantive right claimable by the petitioner once the petitioner was eligible under the scheme to get the benefit. Resultantly, the decision of Respondent Director General of Foreign Trade reflected in email communication dated 10.06.2021 refusing to change the Scheme Code from 19 to 60 in EDI shipping bills is hereby set aside - Petition allowed.
Issues:
- Petition seeking direction against Director General of Foreign Trade to accept applications for export benefits under RoSCTL Scheme. - Dispute over incorrect Scheme Code in shipping bills leading to denial of export benefits. - Legal arguments regarding technical hindrance versus substantive entitlement under the scheme. - Interpretation of procedural law in the context of irregularity versus illegality. Analysis: 1. The petitioners sought direction against the Director General of Foreign Trade to accept their applications for export benefits under the RoSCTL Scheme for 70 shipping bills. The Principal Commissioner of Customs had approved the conversion of the shipping bills from Scheme Code 19 to Scheme Code 60, but the Director General of Foreign Trade refused to grant the benefits based on the incorrect Scheme Code entered during export (Para 2). 2. The petitioners argued that the denial of benefits was illegal and arbitrary. They emphasized that the technical ground of entering the wrong Scheme Code should not override their substantive entitlement under the scheme. Legal precedents were cited to support this argument (Para 4). 3. The respondents contended that the petitioner failed to follow the correct procedure by not entering the prescribed Scheme Code at the time of export. They highlighted that manual amendments made by Customs were not electronically transmitted to the Director General of Foreign Trade, leading to a lack of application for benefits under the RoSCTL Scheme (Para 4.2, 4.3). 4. The Court observed that the petitioner's entitlement under the export scheme was not disputed, and entering the correct code was a procedural requirement. The Court held that technical glitches should not impede the petitioner's substantive rights to claim benefits under the scheme (Para 5, 5.2). 5. Drawing on legal principles, the Court distinguished between irregularity and illegality. It explained that the petitioner's error in entering the wrong Scheme Code was an irregularity, not an illegality, and should not deprive them of their substantive rights. The Court emphasized that procedural law should aid justice, not defeat it (Para 5.4, 5.4.1). 6. Consequently, the Court allowed the petition, setting aside the decision of the Director General of Foreign Trade and directing acceptance of the petitioner's application for export benefits under the RoSCTL Scheme. The Court specified that if the system did not permit correction, the application should be accepted manually, deeming it filed with the correct Scheme Code. A timeline of 12 weeks was set for completion of this process (Para 6, 6.1). 7. The petition was allowed, and the rule was made absolute, disposing of the main petition and related Civil Application (Para 7).
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