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2021 (3) TMI 91 - HC - CustomsRejection of applications filed under the Merchandise Exports from India Scheme (MEIS) - rejection on the ground of mis-declaration of intent by the petitioner and thereby depriving the petitioner benefit under the said scheme - HELD THAT - It is an admitted position that petitioner committed an error while filling the shipping bills. Petitioner had actually intended to claim benefit under what is known as MEIS but while filling the shipping bills, petitioner had inadvertently marked N (for No) instead of Y (for Yes) in the declaration of intent column. Since the EDI system was followed online, corrections could not be done. In the case of non-EDI cases, under the provisions of section 149 of the Customs Act only manual corrections can be made by a party. Respondents' only contention is that since the entire procedure is followed by the system portal there can be no amendment in the shipping bills. Save and except this submission on behalf of the respondents there is no other challenge to the petitioner's case on merit. The facts in the present case are identical to the facts of Pasha International 2019 (2) TMI 1187 - MADRAS HIGH COURT decided by the Madras High Court and there are no reason as to why the petitioner herein should not be extended the benefit under MEIS considering that the only lapse on the part of the petitioner was that it had inadvertently mentioned in the reward column N (for No) instead of Y (for Yes). This is a procedural defect and is curable considering the fundamental objective of the scheme under Chapter 3 of the FTP 2015-20. The basic objective of the Exports from India Schemes is to provide reward to the exporters and to promote manufacture and export of notified goods / products to notified markets. Once this is done, the party is entitled and eligible to claim its reward - In the instant case, while doing so, petitioner had inadvertently committed an error while filing up the claim form on the DGFT portal and entered its declaration of intent as N (for No) instead of Y (for Yes) resulting in rejection of petitioner's claim for reward under MEIS. Except for this inadvertent mistake, petitioner is otherwise eligible and entitled to the reward under MEIS. Such a procedural mistake on the part of petitioner should not deprive the petitioner from the benefit of the reward under MEIS. A similar situation was in fact considered by the respondents in respect of shipping bills for the period 01.04.2015 to 31.05.2015 at the time of inception of the FTP, when exporters had inadvertently marked N in the reward item box and wished to seek MEIS benefit. Public Notice 47/2015-20 dated 08.12.2015 was issued by the DGFT to give the benefit of MEIS reward in such cases. The petitioner is entitled to the reward under MEIS in respect of its shipping bills wherein exports of notified goods / products with ITC(HS) code to the notified markets have been carried out by the petitioner under the FTP 2015-20 - Petition allowed.
Issues Involved:
1. Rejection of applications under Merchandise Exports from India Scheme (MEIS) due to mis-declaration of intent. 2. Procedural requirements and errors in filing applications for MEIS benefits. 3. Jurisdiction and authority to amend shipping bills under Section 149 of the Customs Act. 4. Substantive versus procedural requirements in claiming MEIS benefits. 5. Relief sought by the petitioner and adequacy of the reliefs claimed. 6. Precedents and judicial interpretations regarding procedural errors in MEIS claims. Detailed Analysis: 1. Rejection of Applications under MEIS: The petitioner challenged the rejection of its MEIS applications by the respondents on the grounds of mis-declaration of intent, thereby depriving the petitioner of benefits under the scheme. The petitioner sought a Writ of Certiorari and Mandamus to direct the respondents to guide the petitioner for necessary modifications and allow MEIS benefits. 2. Procedural Requirements and Errors in Filing Applications: The petitioner, a private limited company engaged in manufacturing and exporting electronic motors, had been exporting to notified markets and claiming MEIS benefits since 01.04.2015. The petitioner filed applications online for duty credit scrips but faced issues due to the manual entry requirement for Non-EDI shipping bills. The applications were rejected because the petitioner did not state the declaration of intent ("We intend to claim rewards under Merchandise Exports from India Scheme") on the shipping bills. The petitioner highlighted difficulties such as errors in marking intent, issues with linking Electronic Bank Realization Certificate (EBRC), and system errors on the DGFT portal. 3. Jurisdiction and Authority to Amend Shipping Bills: The petitioner’s application for amending a shipping bill under Section 149 of the Customs Act was rejected, and the appeal was dismissed on jurisdictional grounds. The Customs Department held that the remedy for such inadvertence was not within its purview under Section 149. 4. Substantive Versus Procedural Requirements: The petitioner argued that the error of marking "N" (for No) instead of "Y" (for Yes) in the declaration of intent column was a procedural mistake. The petitioner cited precedents where courts allowed corrections in shipping bills for procedural errors, emphasizing the distinction between substantive conditions and procedural requirements. The petitioner referred to the Supreme Court's decision in Mangalore Chemicals & Fertilizers Ltd. vs. Deputy Commissioner, highlighting that procedural infractions should not override substantive entitlements. 5. Relief Sought by the Petitioner and Adequacy of the Reliefs Claimed: The petitioner sought directions for the respondents to guide and communicate necessary modifications to allow MEIS benefits. The respondents argued that the reliefs claimed were vague and insufficient. The court noted the procedural mistake and emphasized the fundamental objective of the MEIS scheme to reward exporters. Despite the poorly drafted reliefs, the court considered the petitioner's case due to the inherent objective of the scheme. 6. Precedents and Judicial Interpretations: The court referred to similar cases decided by the High Courts of Kerala and Madras, where procedural errors in marking intent on shipping bills were addressed. The courts directed the issuance of No-Objection Certificates (NOC) to enable petitioners to claim MEIS benefits. The court found the facts in the present case identical to those precedents and concluded that the petitioner should be extended the benefit under MEIS. Conclusion and Orders: The court quashed the rejection letters/orders and directed the respondents to issue NOCs for EDI online shipping bills. The petitioner was allowed to file fresh applications with documentary evidence, and the respondents were directed to consider these applications afresh, providing an opportunity for a personal hearing. The writ petition was disposed of in these terms without any order as to costs.
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