2017 (2) TMI 50 - HC - Customs

Conversion of shipping bill from duty drawback scheme to Advance Authorization Scheme - export of white refined sugar / raw sugar - conversion of shipping bill from one scheme to another scheme beyond three months from the date of Let Export Order (LEO) - amendment in the shipping bill to correct the mistake - It is submitted that at the time of execution of goods materials given in declaration will be verified. It is submitted that in the present case it was not verified since shipping bill was not filed under DEEC scheme and now the verification is not possible as the materials are not available. Making above submissions and relying upon the above decisions, it is requested to dismiss the present petition. Held that - it is the case of the petitioner that though they imported the goods under the shipping bill under the Advance Authorization Scheme, through oversight and by mistake it was punched as duty drawback. Therefore, it is the case on behalf of the petitioner that subsequently when they requested to amend the bill of entry, the case would fall under Section 149 of the Custom Act, which does not provide any limitation to make application to amend the shipping bill and therefore, the authorities are not justified in rejecting the application on the ground that the same is not within the period of three months, relying upon board Circular No. 36 of 2010. For enabling an exporter to draw the benefits of any scheme, not only physical verification of the documents would be required but also verification of the goods of export as also their examination by the Customs was necessarily required to be done. It is required to be noted that what is considered at the time of DECC, the appropriate inquiry would be limited to the extent to satisfy the authority whether raw material which was imported has been used in manufacturing final product or not. So far as Advance Authorization Scheme is concerned, the appropriate authority is required to consider after holding appropriate inquiry that the raw material which was imported has only been used in the manufacture of final product and that final product has been actually exported. It cannot be said that the respondents have committed any error and / or illegality in rejecting the application of the petitioner considering the Board Circular No. 36 of 2010 - petition dismissed.

Issues Involved:

1. Applicability of Circular No. 36 of 2010
2. Applicability of Section 149 of the Customs Act
3. Amendment vs. Conversion of Shipping Bill
4. Verification of Exported Goods under Advance Authorization Scheme

Issue-wise Detailed Analysis:

1. Applicability of Circular No. 36 of 2010:

The petitioner argued that Circular No. 36 of 2010 should not apply as it was not a case of conversion from one scheme to another but an amendment to correct a mistake. The respondent contended that the case involved conversion from the drawback scheme to the Advance Authorization scheme, making Circular No. 36 of 2010 applicable. The court agreed with the respondent, noting that the request was for conversion, not a mere amendment, and thus fell under the purview of Circular No. 36 of 2010.

2. Applicability of Section 149 of the Customs Act:

The petitioner claimed that Section 149 of the Customs Act, which allows amendments without a time limit, should apply. They argued that the mistake in the shipping bill should be corrected under this section. The respondent countered that Section 149 was inapplicable as the case involved conversion, not amendment. The court concurred with the respondent, stating that Section 149 was not applicable in this scenario as it involved a change in the scheme, not just an amendment.

3. Amendment vs. Conversion of Shipping Bill:

The petitioner maintained that the case was one of amendment due to a mistake in the shipping bill and not a conversion from the drawback scheme to the Advance Authorization scheme. The respondent argued that it was indeed a conversion, requiring adherence to Circular No. 36 of 2010. The court sided with the respondent, emphasizing that the request for changing the scheme from drawback to Advance Authorization constituted a conversion, not a mere amendment.

4. Verification of Exported Goods under Advance Authorization Scheme:

The petitioner argued that the exported goods were manufactured from raw materials imported under the Advance Authorization scheme and that documentary evidence existed to prove this. They contended that the amendment should be allowed based on these documents. The respondent asserted that verification was not possible as the goods had already been exported and the shipping bill was not filed under the DEEC scheme. The court agreed with the respondent, noting that physical verification and examination of the goods were necessary, which was not feasible after such a long period.

Conclusion:

The court concluded that the respondents did not commit any error or illegality in rejecting the petitioner's application based on Circular No. 36 of 2010. The petition was dismissed, and the notice was discharged.

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