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2023 (2) TMI 74 - HC - CustomsGrant of reward under the Merchandise Exports from India Scheme - acceptance of amendment of 12 shipping bills - period from December 2017 to July 2019 - HELD THAT - The shipping bills duly amended under section 149 are legitimate in the eyes of the law. However, even though the law permits amendment to the shipping bills under section 149 of the Act, it has no functional effectiveness for claiming benefit under MEIS as per the stand of DGFT. This would render the power under section 149 of the Customs Act to amend the shipping bills to correct the declaration and reward item field, nugatory. Such a position would cause extreme hardship to the persons claiming benefits of the scheme. When a software regulates the entire process, the DGFT may have a reasonable objection in processing the copies of the amended shipping bills not transmitted online to it. The Policy Relaxation Committee has correctly pointed out that in the computerized environment, when the governance of MEIS is online, it is difficult to proceed unless amended shipping bills are transmitted online - It is thus necessary for the Respondents- Customs Department to come up with a solution so that an issue such as the one presented does not recur and the parties entitled to the benefits of MEIS are not required to come to the Court for such trivial issues. The Petition be listed on board under the caption For Directions on 27 February 2023 for reporting compliance on this aspect.
Issues Involved:
1. Quashing the decision of the Policy Relaxation Committee. 2. Granting reward under the Merchandise Exports from India Scheme (MEIS). 3. Acceptance of amendment of shipping bills by the Commissioner of Customs. 4. Coordination between Customs Department and DGFT for online transmission of amended shipping bills. Issue-wise Detailed Analysis: 1. Quashing the Decision of the Policy Relaxation Committee: The petitioner sought to quash the decision taken by the Policy Relaxation Committee in Case No.71 during its meeting on 13 April 2022. The Committee had rejected the petitioner's request to allow MEIS benefits against 12 shipping bills that were erroneously marked "N"¯ instead of "Y"¯. The Committee's decision was based on the inability to reflect manual amendments in the automated system and the non-transmission of the concerned shipping bills by the Customs authorities to the DGFT. 2. Granting Reward under the Merchandise Exports from India Scheme (MEIS): The petitioner requested the court to direct the respondents to grant a reward under the MEIS for the goods exported under 12 shipping bills, amounting to Rs.15,24,334/-. The petitioner argued that the error in marking "N"¯ instead of "Y"¯ was bona fide and that the Customs Department had permitted the amendment of the shipping bills. The petitioner contended that they should not be deprived of the benefits due to a lack of coordination in the software maintained by the respondents. 3. Acceptance of Amendment of Shipping Bills by the Commissioner of Customs: The Commissioner of Customs had allowed the amendment of the shipping bills through certificates dated 7 October 2019 and 14 December 2020. The certificates confirmed that the amendments were made after scrutinizing the documentary evidence in existence at the time of export. However, the DGFT did not consider these amendments because they were not transmitted online, as required by the procedural provisions outlined in the Foreign Trade Policy (FTP) 2015-2020 and the Hand Book of Procedures (HBP) 2015-2020. 4. Coordination Between Customs Department and DGFT for Online Transmission of Amended Shipping Bills: The court noted a clear lacuna in the existing procedure regarding the handling of shipping bills amended under section 149 of the Customs Act. The DGFT maintained that it could only process shipping bills transmitted online, while the Customs Department stated that there was no procedure to transmit amended shipping bills online. This lack of coordination rendered the amendments ineffective for claiming MEIS benefits, causing hardship to the petitioner. Judgment and Directions: The court emphasized the importance of integration between the Customs Department and DGFT to make the MEIS policy efficient and workable. It highlighted the need for the respondents to coordinate and find a solution to the issue, possibly by setting up a joint committee. The court made the Rule absolute in terms of prayer clauses (a) and (b), directing the concerned departments to take necessary steps within four weeks. The respondents were also instructed to file an affidavit detailing the steps taken to enable the submission of amended shipping bills to the DGFT. The matter was listed for further directions on 27 February 2023 to report compliance.
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