2022 (2) TMI 804 - AT - Customs

Request for conversion of free shipping bills to advance authorization shipping bills rejected - rejection on the ground of time limitation - rejection also on the ground that goods exported have not been physically examined - Circular No. 36/2010 dated 23.9.2010 - HELD THAT - The period involved in these shipping bills are after the amendment of section 149 of the Customs Act, 1962 with effect from 1.8.2019. The amended provision states that the proper officer can allow amendment of a document if presented within such time, subject to restriction and conditions as may be prescribed. However, so far there is no notification issued prescribing time limit or stipulating any conditions for amendment of shipping bill. The department has relied upon Board Circular No. 36/2010 dated 23.9.2010. The said Circular was issued prior to this amendment. The Circular stipulates a time limit of three months from the date of issuance of LEO. The said circular being much prior to the amendment of section 149 of the Customs Act, 1962, the same cannot be applied to reject the request for conversion of shipping bill, when the Courts and Tribunal has repeatedly held that when the statute does not provide any time limit, the request for amendment cannot be rejected as time barred applying the Board Circular. The Hon'ble High Court of Madras in the case of CC Vs. Diamond Engineering (Chennai) Pvt. Ltd. 2019 (5) TMI 492 - MADRAS HIGH COURT Madras High Court considered the issue of time limit of three months stipulated in the Board Circular and held that the same is not applicable. Second ground for rejection for conversion of free shipping bills is that the goods exported have not been physically examined - HELD THAT - It thus becomes evident that the goods have been stuffed under the supervision of the Preventive Officer who has verified the invoice, packing list etc. before stuffing the goods into the container. Moreover, there is no requirement under section 149 of the Customs Act, 1962 that the conversion can be allowed only if the goods have been subjected to physical examination. Therefore, the rejection of the request for conversion on the ground that physical examination was not conducted before export is without any legal basis. The rejection of request for conversion of free shipping bills to Advance Authorization shipping bills are not justified - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Rejection of the request for conversion of free shipping bills to advance authorization shipping bills.
2. Application of time limit for filing amendment requests as per Board Circular No. 36/2010.
3. Physical examination of goods as a condition for conversion of shipping bills.

Detailed Analysis:

1. Rejection of the request for conversion of free shipping bills to advance authorization shipping bills:
The appellant exported various products under free shipping bills due to a technical error in the EDI system, which prevented the filing of advance authorization shipping bills. The error was caused by a discrepancy in the unit of measurement between the invoice (meters) and the advance authorization (kilograms). Despite this, the appellant mentioned the advance authorization license number in the "marks and numbers column" of the shipping bill and the Preventive Officer supervised the stuffing of the goods. The appellant filed an application for amendment to convert the shipping bills to advance authorization shipping bills, which was rejected by the Commissioner of Customs.

2. Application of time limit for filing amendment requests as per Board Circular No. 36/2010:
The Commissioner of Customs rejected the appellant's request based on Board Circular No. 36/2010, which prescribes a time limit of three months from the LET export order for filing amendment requests. However, the appellant argued that Section 149 of the Customs Act, 1962, does not prescribe any time limit for such amendments. The Tribunal referenced the case of M/s. Autotech Industries (India) Pvt. Ltd. and the Hon'ble High Court of Madras, which held that there is no time limit for seeking conversion of shipping bills. The Tribunal concluded that the Circular, being issued prior to the amendment of Section 149, cannot be applied to reject the request for conversion based on a time bar.

3. Physical examination of goods as a condition for conversion of shipping bills:
The department argued that the Preventive Officer's endorsement does not equate to a physical examination of the goods, which is required for conversion. However, the Tribunal noted that Section 149 does not stipulate physical examination as a condition for amendment. The Preventive Officer's supervision of the stuffing and verification of the invoice and packing list were deemed sufficient. The Tribunal found no legal basis for rejecting the conversion request on the grounds of lack of physical examination.

Conclusion:
The Tribunal held that the rejection of the request for conversion of free shipping bills to advance authorization shipping bills was not justified. The impugned order was set aside, and the appeal was allowed with consequential relief. The Tribunal emphasized that Section 149 of the Customs Act, 1962, does not prescribe a time limit for amendments, and the requirement for physical examination is not a condition under the said section. The judgments from previous cases supported the appellant's position, leading to the favorable outcome.