2022 (1) TMI 73 - HC - Customs

Merchandise Export from India Scheme (MEIS) - Amendment in the shipping bill - entitlement to incentives on the realized Free On Board (FOB) value of exports - HELD THAT - It is noticed that it is a genuine mistake on the part of the petitioner which has led the petitioner approaching this Court for prayer of permitting the bill manually. We notice that the respondent Nos.1 and 2 had permitted the manual amendment of shipping bill in question being the shipping bill bearing No.5561585 dated 14.06.2018 while filing shipping bill online in EDI system of the customs inadvertently systems had got been corrected value of goods exported as has been noted by the PRC Committee in its meeting. A representation made had weighed with the said Committee. The issue is more of procedural in nature than of substantive kind as the software has the limitation and it does not permit even after the manual correction of the shipping bill, the benefit to flow of MEIS Scheme as it does not recognize said manual correction, the petitioner is deprived of the benefits - No technicality can mar the right of the parties which otherwise accrued under the substantive law. Here when genuineness of the export and entitlement of petitioner otherwise is not in any manner disputed, this technical glitch shall in no manner hamper the request of the petitioner of getting benefit. The petition is allowed without imposing the late cut charges the benefits of MEIS shall be allowed.

Summary

Issues:
1. Interpretation of the Merchandise Export from India Scheme (“MEIS”) under the Foreign Trade Policy.
2. Procedural requirements for amending a shipping bill under Section 149 of the Customs Act.
3. Discretion of authorities in granting benefits under the MEIS scheme.
4. Technical limitations in the Electronic Data Interchange (EDI) system affecting manual amendments to shipping bills.
5. Judicial review of administrative decisions regarding entitlement to trade benefits.

Analysis:
1. The petitioner, engaged in manufacturing steel pipes for export, sought benefits under the MEIS scheme. An error in declaring the commission value in the shipping bill led to a discrepancy, which the petitioner sought to rectify within the stipulated time frame.

2. The petitioner followed the prescribed procedure by approaching the Customs Officer for amending the shipping bill under Section 149 of the Customs Act. The officer acknowledged the error and allowed the amendment, but technical issues prevented the amendment from reflecting in the EDI system.

3. The Policy Relaxation Committee (PRC) acknowledged the genuine error and recommended manual consideration for granting MEIS benefits. However, technical limitations hindered the implementation of this decision, leading to a rejection by the PRC.

4. The court considered the procedural nature of the issue and the technical limitations of the EDI system. Referring to a previous case, it emphasized that substantive entitlements should not be denied due to technical errors in electronic systems.

5. Ultimately, the court allowed the petition, directing the authorities to grant MEIS benefits based on the manually amended shipping bill without imposing late cut charges. The judgment highlighted that technical glitches should not impede legitimate entitlements under trade schemes.

This detailed analysis of the judgment outlines the key issues addressed by the court, including procedural requirements, technical limitations, and the overarching principle of upholding substantive entitlements despite technical errors.