2003 (11) TMI 121 - AT - Customs

Shipping Bill - Maintainability of Appeal - manufacture and export of all types of sanitary-wares - Whether the Appellants are eligible to get their free Shipping Bills converted into DFRC Shipping Bills - HELD THAT - There is no substance in the contention of the learned Senior DR that Appeal is not maintainable under the Customs Act since the Appellants are seeking the benefit of DFRC Scheme which is provided by way of a Notification issued u/s 25 of the Customs Act. Once the said benefit is disallowed, the Appellants being aggrieved parties are eligible to file Appeal against such order. It has not been disputed by the Revenue that both the Appellants have exported sanitary-wares and the same is covered under DFRC Schedule against Standard Input-Output Norms (K-74) of the Handbook of Procedures, Vol. II. In the Norms against Export Item 'Sanitary-ware' - it is mentioned that Import Items are (1) Zirconium Silicate/Opacifier and (2) Ceramic colours or White prepared pigments. The Norms also specify the quantity of Import Item which is allowable. A perusal of both the Circulars, referred to by the learned Advocate, reveals that the Government has allowed conversion of free Shipping Bills into Advance licence/DEPB/DFRC/Drawback Shipping Bills without the necessity of exporter proving that he was forced to file free Shipping Bill by Customs at the time of export of goods. Accordingly the conversion of free Shipping Bill into DFRC Shipping Bill cannot be denied on the ground that the Appellants have not established that they were forced to file Shipping Bills under free Shipping Bills category. The Appellants have also submitted Certificate from the Chartered Engineers Surveyors to show that Zirconium Silicate/Opacifier is used for the manufacturing of sanitary-ware products. In view of the said inputs being mentioned in the Standard Input-Output Norms and the fact that Chartered Engineer has also certified the use of Zirconium Silicate/Opacifier, the conversion of Shipping Bill cannot be denied on the ground that the Appellants have not proved the use of the ingredients. We, therefore, allow both the appeals filed by the Appellants.

Summary

Issues involved: Whether the Appellants are eligible to convert their free Shipping Bills into DFRC Shipping Bills.

Summary:
The Appellants, engaged in manufacturing and exporting sanitary-wares, sought to convert their free Shipping Bills to DFRC Shipping Bills. Customs Authorities required a Certificate listing the inputs used in the export product, which the Appellants did not provide initially. Circulars issued by the Board clarified conditions for conversion, including proof of used inputs and compliance with export scheme conditions. The Appellants applied for conversion, but their requests were rejected for not proving they were forced to file free Shipping Bills and for not verifying ingredient use as required by the DFRC Scheme.

The learned Advocate argued against the Commissioner's insistence on proving forced filing, citing relevant Circulars and a Tribunal case. He emphasized that the export of sanitary-wares occurred, and Zirconium Silicate was allowed for import against such exports. The Appellants had used Zirconium Silicate, supported by invoices and certificates. The Advocate contended that Central Excise verification was not mandatory for DFRC claims, citing a legal precedent.

The Departmental Representative argued against the Tribunal's jurisdiction and pointed out the Appellants' failure to prove ingredient use as required by Circulars. The Appellants later submitted the necessary documents.

The Tribunal found the Appeal maintainable under the Customs Act due to the Appellants seeking DFRC Scheme benefits. It noted the Appellants' export of sanitary-wares and compliance with Norms allowing Zirconium Silicate import. Circulars indicated conversion of free Shipping Bills without proving forced filing. Considering the evidence of Zirconium Silicate use, the Tribunal allowed the appeals, ruling in favor of the Appellants.