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TMI Blog2023 (4) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... to ascertain that goods were eligible for the export promotion scheme to which conversion has been requested. The conversion was then made subject to certain other conditions, primarily the time limit to make the application for conversion, within a period of three months from the date of Let Export Order (LET) - The conditions enshrined in the circular would definitely enable the department to achieve the objective to avoid duplicacy of the benefit which would prejudice the revenue. If the request / application seeking conversion is made within a specified period, it would enable the department to verify the claim diligently and promptly as also the availability of the documents. In the present case as noted by the adjudicating authority there has been delay of nearly 6 months to 1 year which is beyond the permissible time limit and for which no reason have been stated by the appellant. The next condition under the circular is regarding the satisfaction of the Commissioner of Customs on the basis of the documentary evidence as without it, it would not be feasible for the department to verify the claim for conversion. As is evident from the circular, the specific requirement is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.12 233 14435 0510278443 dt. 8.3.11 3 29.12.11 16.11.10 to 25.11.10 468 12545 0510262749 Dt. 21.4.10 4 19.1.12 1.5.11 to 23.5.11 1195 32980.170 0510289161 Dt. 20.04.12 4. The request of IOC in terms of the aforesaid applications for conversion of DEEC shipping bills to drawback shipping bills for the purpose of availing duty drawback were examined in terms of the provisions of section 149 of the Customs Act read with the CBEC's Circular No. 36 / 2010-Cus dated 23.09.2010, however the same were found to be time barred and were accordingly rejected vide order dated 15.02.2012. On the request of the appellant vide letter dated 16.04.2012, the adjudicating authority passed a detailed reasoned order dated 18.06.2012, which is under challenge in this appeal. 5. We have heard Ms Reena Khair for IOC and Mr. Rakesh Kumar authorised representative for the revenue and have perused the records of the case. 6. The issue for our consideration is whether the impugned order rejecting the request made by IOC for conversion of DEEC shipping bills to Drawback shipping bills on the ground of delay and lack of documentary evidence is unsustainable? 7. The main argument of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in existence at the time the goods were cleared, deposited or exported, as the case may be. Rule 12. Statement/Declaration to be made on exports other than by Post. - (1) In the case of exports other than by post, the exporters shall at the time of export of the goods - (a) state on the shipping bill or bill of export, the description, quantity and such other particulars as are necessary for deciding whether the goods are entitled to drawback, and if so, at what rate or rates and make a declaration on the relevant shipping bill or bill of export that - (i) a claim for drawback under these rules is being made; (ii) in respect of duties of Customs and Central Excise paid on the containers, packing materials and materials and the service tax paid on the input services used in the manufacture of the export goods on which drawback is being claimed, no separate claim for rebate of duty or service tax under the Central Excise Rules, 2002 or any other law has been or will be made to the Central Excise authorities: Provided that if the Commissioner of Customs is satisfied that the exporter or his authorised agent has, for reasons beyond his control, failed to comply with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not. The conversion may be permitted in accordance with the provisions of section 149 of the Customs Act, 1962 on a case to case basis on merits provided the Commissioner of Customs is satisfied, on the basis of documentary evidence which was in existence at the time the goods were exported, that the goods were eligible for the export promotion scheme to which conversion has been requested. Conversion of shipping bills shall also be subject to conditions as may be specified by the DGFT/MOC. The conversion may be allowed subject to the following further conditions: a) The request for conversion is made by the exporter within three months from the date of the Let Export Order (LEO). b) On the basis of available export documents etc., the fact of use of inputs is satisfactorily proved in the resultant export product. c) The examination report and other endorsements made on the shipping bill/export documents prove the fact of export and the export product is clearly covered under relevant SION and or DEPB/Drawback Schedule as the case may be. d) On the basis of S/Bill/export documents, the exporter has fulfilled all conditions of the export promotion scheme to which he is seeki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought cannot be denied on the ground of limitation. The Learned Single Member distinguished the decision of the Delhi High Court in M/s Terra Films Pvt. Ltd., vs. Commissioner of Customs - 2011 (268) ELT 443 being factually different. The Hon‟ble High Court of Madras rejected the appeal filed by the department against the said order holding that no substantial question of law is involved, Commissioner of Customs Vs. M/s Diamond Engg. Chennai P. Ltd. 2019 - TIOL-HC-MAD-CUS. In so far as the present case is concerned, we do not find the same being distinguishable from the decision of the Delhi High Court in M/s. Terra (supra) and being the jurisdictional High Court we are bound by the said decision and the interpretation placed on Section 149 of the Customs Act and the Circular. The appellant had referred to certain latest decisions of various High Courts and Tribunal where the Circular No. 36/2010 was under consideration. The findings in all these decisions is more or less the same that section 149 does not prescribe any time limit and the Circular has to be construed merely as guidelines for the Officers for the purpose of Section 149 and is not a statutory provision in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ELT 397 holding that circular cannot be applied to reject the request of conversion / amendment of shipping bills. 11. We may now refer to the decisions cited by the Learned authorised representative for the revenue. The decision of the Delhi High Court in M/s Terra Films Pvt. Ltd., (supra), where the learned Division Bench dealt with similar fact situation of a request for conversion of the DEEC/DEPB shipping bills into DEEC/DEPB cum Drawback Scheme after lapse of more than one year though the shipping bills had mentioned about the scheme under which exports were made as DEEC/DEPB and the goods stood already exported. The Court considered the provisions of section 149 of the Customs Act and the guidelines contained in the Board‟s Circular No. 4/2004 dated 16.01.2004 applicable at the relevant time and observed that the discretion vested in the proper officer to permit amendment in any document after the same has been presented in the customs house has to be though exercised judicially, it was qualified with the proviso that the amendment could be allowed only if it was based on documentary evidence in existence at the time the goods were exported. The Court also noticed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or not, can be verified is concerned, as such, as observed herein above Section 149 of the Customs Act will not be applicable. Even otherwise, it is required to be noted that what is considered at the time of DECC, the appropriate inquiry would be limited to the extent to satisfy the authority whether raw material which was imported has been used in manufacturing final product or not. So far as Advance Authorisation Scheme is concerned, the appropriate authority is required to consider after holding appropriate inquiry that the raw material which was imported has only been used in the manufacture of final product and that final product has been actually exported". We fully agree with the aforesaid decisions by the different High Courts and followed by other Benches of the Tribunal in Unique Pharmaceutical Laboratories Vs. Commissioner of Customs, Nhava Sheva 2017 (5) TMI 268 (T-Mum.), M/s PLG Power Ltd. Vs Commissioner of Customs (Export) Nhava Sheva 2019 (1) TMI1 672 and Doshion Ltd., Vs. CC, Ahmedabad 2017 (7) TMI 1026. The present case is squarely covered by these decisions and the objection by the appellant that they are with reference to the earlier Circular No 4 of 2004 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t amendment in any document after the same has been presented in the Customs house. Though this discretion was to be exercised judiciously, but it was qualified with the proviso that the amendment could be allowed only if it was based on the documentary evidence in existence at the time the goods were exported. The Commissioner in the remand case has rightly observed that the present case in fact relates to the request for conversion of shipping bills from one export promotion scheme into another and was not merely of an amendment in the shipping bill. The request was made for conversion from one scheme to another after the lapse of long period of more than one year. It was a case of request for "conversion" and not of "amendment" inasmuch by converting from one scheme to another, it was not only addition of word "cum" duty drawback, but change of entire status and character of the documents. Even if it was to be taken as a case of amendment, the proper officer may not be in possession of the documents sought to be amended after lapse of such a long period, particularly when the goods already stood exported. For enabling an exporter to draw the benefits of any scheme, not only phys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circular and whether the conditions set out are mandatory or directory, we need to look into the object in adding those conditions in the circular. The underline object of the circular no doubt is to relax the norms for granting conversion of one export promotion scheme to another, however at the same time the circular provides that due care should be taken to ensure that the exporter does not take the benefit of both the schemes, i. e. the scheme to which conversion is sought and the scheme from which conversion is sought. The conditions enshrined in the circular would definitely enable the department to achieve the objective to avoid duplicacy of the benefit which would prejudice the revenue. If the request / application seeking conversion is made within a specified period, it would enable the department to verify the claim diligently and promptly as also the availability of the documents. In the present case as noted by the adjudicating authority there has been delay of nearly 6 months to 1 year which is beyond the permissible time limit and for which no reason have been stated by the appellant. 14. The next condition under the circular is regarding the satisfaction of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15.02.2012 by the competent authority and therefore the same has no relevance. We cannot ignore these findings though the appellant had submitted that they have filed the requisite documents. 15. We would like to refer to the decision in Indian Aluminum Company Ltd Vs Thane Municipal Corporation 1991(55) ELT454, where the Apex Court observed that in the matter of exemption or concessions the non observance of even procedural condition should not be condoned, if it is likely to facilitate commission of fraud and introduce administrative inconveniences. Further, the Court was pleased to observe that: "The learned Counsel, however, submitted that even now the authorities can verify the necessary records which are audited and submitted to the authorities and find out whether the material was used in its own undertaking or not. We do not think we can accede to this contention. Having fail to file the necessary declaration he cannot now turn around and ask the authorities to make a verification of some records. The verification at the time when the raw material was still there is entirely different from a verification at a belated stage after it has ceased to be there. Maybe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot pick and choose the terms of the circular. 19. The contention raised by the appellant that the circular by prescribing the period of 3 months for making the application for conversion of the scheme is beyond the provisions of section 149 of the Customs Act is already unsustainable. We do not agree with such a submission for the simple reason that section 149 is silent on the aspect of limitation and the circular has only filled in that lacuna which does not amount to overriding the statutory provision. A circular though being a subordinate legislation can very well provide for the actual modalities for working out the provisions of the statute specially when the main statue its silent on that aspect. If the circular can be accepted for extending the benefit to the exporter it can also impose conditions for receiving those benefits. The Apex Court in Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd., (2013) 5 SCC 470 was pleased to observe as follows: I. Approbate and reprobate 15. A party cannot be permitted to "blow hot-blow cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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