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2021 (12) TMI 293 - AT - CustomsRejection of the request for conversion of free shipping bills to drawback shipping bills - Board Circular No. 36/2010-Cus. dated 23.09.2010 - Section 149 of the Customs Act, 1962 - HELD THAT - The Board Circular No. 36/2010-Cus dated 23.09.2010 allows conversion of free shipping bills into drawback shipping bills. The above Circular states that if the Commissioner is satisfied that the exporter failed to comply with the provisions of Rule 13 of the Drawback Rules, 2017 (filing drawback shipping bill) for reasons beyond his control, the amendment can be allowed - It is clear from the provisions as well as the Circular that the amendment of free shipping bills to drawback shipping bills can be allowed. The appellant has been able to sufficiently establish that they did not file the drawback shipping bill at the time of export for the reason that the merchandiser who was handling the exports did not have knowledge about the benefit that could be claimed. On similar set of facts, when there was an inadvertent omission to claim drawback by filing drawback shipping bills, the request for conversion of the shipping bills was considered by the Tribunal in the case of M/S. AUTOTECH INDUSTRIES (INDIA) PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS CHENNAI IV COMMISSIONERATE 2021 (11) TMI 518 - CESTAT CHENNAI , the Tribunal held that if the request is made within reasonable time of three years, the conversion of free shipping bills to drawback shipping bills can be allowed. The request for conversion of free shipping bills to drawback shipping bills has to be allowed. However, since the application for conversion is filed on 23.11.2017 in regard to the shipping bills for the period 2013-14 to 2016-17, the period of limitation as set out in the decision of the Tribunal in M/s. Autotech Industries (India) Pvt. Ltd. will apply. Hence, the shipping bills beyond the period of three years will not be eligible for conversion. For the limited purpose of looking into the shipping bills which are beyond the limitation period of three years, when computed from the date of application i.e., 23.11.2017, the matter is remanded to the Adjudicating Authority. Appeal allowed by way of remand.
Issues Involved:
1. Legality and propriety of the rejection of the request for conversion of free shipping bills to drawback shipping bills. Detailed Analysis: Issue 1: Legality and propriety of the rejection of the request for conversion of free shipping bills to drawback shipping bills The appellant is aggrieved by the rejection of the request for conversion of free shipping bills to drawback shipping bills. The appellant, engaged in the manufacture and export of leather products, realized that drawback benefits were not claimed for exports made to M/s. Aspinal of London due to the merchandiser's lack of awareness. Upon realization, the appellant requested conversion of the free shipping bills to drawback shipping bills for the period from 2013-14 to 2016-17. The Adjudicating Authority rejected the request on the grounds that the appellant did not provide a plausible explanation for not filing the drawback shipping bills at the time of export. The appellant argued that the merchandiser handling the exports was unaware of the drawback procedure, and corrective measures were taken once the new CEO took charge. The appellant relied on the Tribunal's judgment in M/s. Autotech Industries (India) Pvt. Ltd. v. Commissioner of Customs, Chennai, which allowed conversion of shipping bills if filed within a reasonable time of three years. The Tribunal noted that the Adjudicating Authority had constituted a committee to examine the documents and samples related to the exports. The committee reported that the goods appeared to be made of 60% or more visible outer/inner surface leather and that the descriptions of old and new items were the same. Despite this, the Adjudicating Authority held that the reason given by the appellant for not filing drawback shipping bills was not convincing. The Tribunal emphasized that Section 149 of the Customs Act, 1962, allows amendment of shipping bills, provided that documentary evidence existed at the time the goods were exported. The Board Circular No. 36/2010-Cus dated 23.09.2010 also permits conversion of free shipping bills to drawback shipping bills if the Commissioner is satisfied that the exporter failed to comply with the provisions for reasons beyond their control. The Tribunal found that the appellant had sufficiently established that the merchandiser's lack of knowledge was the reason for not filing the drawback shipping bills. The Tribunal referred to the case of M/s. Autotech Industries (India) Pvt. Ltd., where it was held that a reasonable period for filing an application under Section 149 is three years. The Tribunal also cited the cases of M/s. Suminter India Organics P. Ltd. and M/s. Polydrug Laboratories Pvt. Ltd., which allowed conversion of free shipping bills to drawback shipping bills. Consequently, the Tribunal allowed the request for conversion of free shipping bills to drawback shipping bills for the period within three years from the date of application, i.e., 23.11.2017. The matter was remanded to the Adjudicating Authority to check if any shipping bills fell beyond the limitation period of three years. In conclusion, the impugned order was set aside, and the appeal was allowed in the above terms.
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