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TMI Blog2021 (12) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... ping bills are concerned. Moreover, the Court cannot be oblivious of the fact that it was a time when software for online filing was merely introduced after converting port into EDI port and therefore, not only there is possibility of the technical glitch, but, the person in whose benefits this had been done also, may not be aware of the procedure and the manner of operation, which may have resulted into depending on some other agencies for committing mistake. And that, by no means can take away the right of the parties, more particularly, when in the manual shipping bills, they had categorically requested for grant of benefits of scheme and that leaves no room of doubt about the intent. Authority once can make out from manner shipping bills, they must not carry the mindset even with reiterative requests from the exporters to avail benefit of Scheme to deny such benefits on sheer technicality. The respondent Authority concerned while passing the order has been oblivious of this initial hiccups and also has overlooked the clear intent expressed in Manual shipping bills insisted by the petitioner. Every time the petitioner indicated from transaction to avail benefits, the same sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.2019, the shipping bills which were electronically filed for exports made by the petitioner Company captured MEIS under the column for Exim Scheme Name and 36 under the column for Exim Scheme Code . In the invoices section, the shipping bills, according to petitioner, captured N instead of Y for reward scheme though in the template, which was filed by the petitioner Company Y was selected for all invoices. 3. It is the say of the petitioner that on further inquiry, it was found that shipping bills had captured Y under MEIS Reward Scheme only in the first invoice, whereas for the rest, it had captured N . Therefore, it is the say of the petitioner that the Company was eligible for reward due to capturing of N through an oversight in all the invoices except one, therefore, the Company was unable to claim MEIS benefits. 4. The shipping bills had contained categorical statements of the Company intending to claim the reward under the MEIS. It is the say of the petitioner that after 08.04.2019, the SEZ port had been converted into EDI port and accordingly, shipping bills for exports were required to be filed electronically through the system, which was maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason, do not get electronically transmitted online in the automated environment and accordingly rejected the case of the petitioner. Hence, the present petition where on issuance of Notice, an affidavit-in-reply is filed by the respondent No.1, Deputy Director General of Foreign Trade, Vadodara, Gujarat, denying all the averments made and contentions raised by the petitioner. 7. According to the respondent, issuance of MEIS are notified in the Foreign Trade Policy 2015-2020 ( FTP hereinafter) as contained in the Hand Book of Procedure as amended from time to time. According to the respondent, the MEIS is to offset infrastructural inefficiencies and associated costs involved in export of goods, which are produced and manufactured in India, especially those having high export intensity, employment potential and this would result in to India s export competitiveness being enhanced. Appendix 3B also lists the rates of rewards on various notified products. The basis of calculation of reward would be on realizing FOB value of export in free foreign exchange or on FOB value of exports as given in the shipping bills in free foreign exchange, whichever is less. It is also a detailed pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porter does not intend to claim the benefit of reward under Chapter 3 of FTP exporter shall tick N (for No)... 10. Rule in para 3.14 makes it clear that marking of Yes in Shipping Bill is a mandatory condition and the petitioner since did not mark the same, he has not fulfilled the condition which is mandatory and has resulted into making MEIS inadmissible. 11. Para 2.58 of the FTP has been depended upon which says that DGFT in public interest passed such orders or grant of such exemption, relaxation or relief as it may deem fit and proper on the ground of genuine hardship and adverse impact on trade to any person or class or category of person. It is further contended that policy relaxation is not a matter of right and PRC considers each case on merits and grant relaxation in policies and procedure only where it feels that the applicant is really suffering genuine hardship resulting into adverse impact. It is disbelieved that it was procedural error of glitch, which has resulted into the bills be marked as N . 12. We have had occasion to hear at length learned advocate Mr. Paritosh Gupta appearing for the petitioner and learned Senior Standing Counsel Mr. Nikunt R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MEIS payable as percentage mentioned in the scheme itself can be transferred for the payment of number of duties and taxes. As can be gathered from material which has been placed on the record is that Sri Lanka was placed in Group-C in the Public Notice No.2 of 2015 dated 01.04.2015. In Gazette of India, the Ministry of Commerce and Industry, Department of Commerce provided in exercise of the powers conferred under para 2.04 of the FTP 2015-20, the schedule of country groups and the code wise list of product with reward rates under Appendix 3B as pointed out to us that Sri Lanka is not one of those country. It is not in dispute that by way of 73 shipping bills, export has been carried out by the petitioner-exporter and he has substantiated the same by way of the documentary evidences, which had happened from 12.05.2016 to 05.01.2017. The Public Notice had been amended firstly on 04.05.2016 and thereafter, on 22.09.2016 whereby Sri Lanka was included and export to Sri Lanka has also been covered under the scheme of MEIS at the rate of 2% and 3% respectively. 7.1 Reference also needs to be made at this stage of the Public Notices No.40/15-20 dated 09.10.2015 and 47/15-20 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.2015, shall be transmitted by Central Board of Excise and Customs to DGFT. 8. Public Notice No.09/2015-20 dated 16.05.2016 amends paragraph No.3.14 in the following manner: Amended paragraph No.3.14: Procedure for Declaration of Intent on EDI and Non EDI shipping bills for claiming rewards under MEIS including export of goods through courier or foreign post offices using e- Commerce (a) (i) EDI Shipping Bills: Marking/ticking of Y (for Yes) in Reward column of shipping bills against each items, which is mandatory, would be sufficient to declare intent to claim rewards under the scheme. In case the exporter does not intend to claim the benefit of reward under Chapter 3 of FTP exporter shall tick N (for No). Such marking/ticking shall be required even for export shipment under any of the schemes of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP (ii) Non-EDI Shipping Bills: In the case of non-EDI Shipping Bills, Export shipments would need the following declaration on the Shipping Bills in order to be eligible for claiming rewards under MEIS: We intend to claim rewards under Merchandise Exports From India Scheme (MEIS) . Such declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits under the Foreign Trade Policy and the contention raised was that after the introduction of electronic process in shipping bills, the amendments under Section 149 of the Customs Act,1962 cannot be done in the EDI system as no notification can be done in the system after the Export Order' is given. It is stated, however, that the 3rd respondent can issue a 'No Objection Certificate' to the petitioner for availing the MEIS benefit and the 4th respondent before Madras High Court was the authority to relax the policy which needed to consider the said certificate to serve the petitioner's purpose. The Court directed the 3rd respondent to issue necessary 'No Objection Certificate' to the petitioner which the petitioner was directed to produce to the 4th respondent and seek the benefit from him which was directed to consider such claim and pass orders thereon expeditiously within a period of three months. 10.1 This was also referred to in case of Pasha International vs. Commissioner of Customs, Tuticorin (supra) where the writ petitioner was manufacturer and exporter of Bags and made-ups. It intended to claim benefit under MEIS and while filling up the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof provides for the procedure for Declaration of Intent on EDI and NonEDI shipping bills for claiming benefits under the MEIS, including export of goods through courier or foreign post offices using eCommerce. Subclause (I) of clause (a) thereof provides the procedure for declaration of intent in case of EDI shipping bills; and subclause (ii) of clause (b) thereof provides the procedure for declaration of intent on any EDI shipping bills. Para 3.14 of the Handbook of Procedure, reads as under: 3.14 Procedure for Declaration of Intent on EDI and Non EDI shipping bills for claiming rewards under MEIS including export of goods through courier or foreign post offices using eCommerce: (a) (i) EDI Shipping Bills: Marking/ticking of Y (for Yes) in Reward column of shipping bills against each item, which is mandatory, would be sufficient to declare intent to claim rewards under the scheme. In case the exporter does not intend to claim the benefit of reward under Chapter 3 of FTP exporter shall tick N (for No). Such marking/ticking shall be required even for export shipments under any of the schemes of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er para 3.14 of Hand Book of Procedure to FTP (201520), all exporters while filling export shipments under all categories of the shipping bills are required to declare the following intent to claim benefit under MEIS: We intend to claim rewards under Merchandise Exports from India Scheme (MEIS) . Declaration of intent is mandatory with effect from June 1, 2015. CBEC has also issued a circular no. 14/2015 dated April 20, 2015, which requires mandatory declaration of intent from 1.6.2015 onwards. In EDI generated shipping bills, exporters are required to tick mark Y in case they intend to claim benefits under MEIS and N in case they do not intend to claim benefit under MEIS. 3. In light of these circumstances and to address the matter, in exercise of powers conferred under paragraph 1.03 of the Foreign Trade Policy (20152020) read with reference to para 3.14 of Handbook of Procedures of FTP 201520, the Director General of Foreign Trade hereby allows the following procedure to be followed where exports have been made between 1.4.2015 to 31.5.2015, and where the exporter has inadvertently marked N in the reward item box and wishes to seek MEIS benefits: Exporters s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner to claim benefits under the MEIS has not been doubted. The sole hurdle in the case of the petitioner is that since the shipping bills are free shipping bills, wherein no declaration of intent has been made, the petitioner is required to get the shipping bills amended by incorporating the following declaration of intent : We intend to claim rewards under Merchandise Exports From India Scheme (MEIS) . 29. In this case, the petitioner applied for the MEIS for the exports made during the period April 2015 to January 2016, under separate applications. The said applications were partly allowed and twenty five shipping bills were disputed. Vide letter dated 03.08.2016, the petitioner was informed by the respondent No.5 Development Commissioner, that since there is no declaration of intent on the shipping bills for claiming benefits under the MEIS, a reference has been sent to the respondent No.3 DGFT for a clarification whether such shipping bills (NonEDI) prior to 01.06.2015 were eligible for benefits under the MEIS benefits or not. Therefore, till that time, its claim will be kept pending. Thus, the claim was kept pending by the concerned authorities. 30. Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by Circular No.36/2010Customs dated 23.09.2010. The sole ground on which the application has been rejected is for non compliance of condition (a) of paragraph 3 of the said circular, namely that the application has been filed beyond a period of three months from the date of filing the Let Export Order. 35. At this juncture, it may be apposite to refer to the decision of the Delhi High Court in Kedia (Agencies) Pvt. Ltd. v. Commissioner of Customs, 2017 (348) ELT 634 (Del.), on which reliance has been placed by the learned advocate for the petitioner, wherein the question that arose for consideration was: Did the CESTAT fall into error in upholding the denial of the petitioner s claim for amendment of its shipping document under section 149 of the Customs Act. The court held thus: 7. In the present case, the appellant had been consistently dealing with the same goods and exporting them previously for over three years. The precondition of a declaration along with the relative forms, for grant of benefit was introduced on 142008 through an amendment to the Handbook of Procedures. It is now settled law that the provisions of the Foreign Trade (Development Regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.09.2010 and Notification No.40/2012( NT) dated 02.05.2012, the decision regarding conversion may be taken on the basis of documentary evidence which was in existence at the time when the goods were exported, subject to the satisfaction of the competent authority. 37. Thus, except for the fact that the request for conversion of the free shipping bill to MEIS shipping bill has been made beyond the time prescribed in Circular No.36/2010Customs dated 23.09.2010, no other objection has been raised on behalf of the respondents. In the opinion of this court, having regard to the peculiar facts of the present case, the omission to file declaration of intent when all other relevant material is available, is not fatal to the petitioner s case. As in the case of Kedia (Agencies) Pvt. Ltd. v. Commissioner of Customs (supra), in the facts of the present case also, in all other respects, that is, as to whether the goods conform to the description in the shipping documents and the value, etc. continues to be ascertainable because the concerned bills, invoices and other shipping documents are available with the customs authorities. The respondents are, therefore, not justified in turni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claration of intent in case of EDI shipping bills. 14. What we notice is that in case of Messrs Gokul Overseas (supra) even the conversion has been permitted by the Court, whereas in the instant case, it is only the question of the EDI bills where inadvertently instead of 'Yes' the ticking was on 'N'. As provided in case of Pasha International vs. Commissioner of Customs (supra) by Madras High Court, this has to be construed as pure and simple mistake on the part of the exporter, when otherwise the respondent has not questioned any of the shipping bills and it is only because the declaration of intent on the said shipping bills for claiming the benefits under the MEIS, the subsequent claim made by him on the EDI is questioned on the ground that Section 149 of the Customs Act would not be applicable. 14. Noticing the fact that in the instant case, the petitioner has already in the several shipping bills that he has presented explicitly expressed its intent of availing the benefits of the reward made under MEIS, the subsequent capturing of the same as NO instead of Y for the reward scheme once the shipping bills were electronically filed for export ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure and the petitioner was not getting the benefits of reward of MEIS claim. 15. The decision of this Court in case of M/s. Raj and Company would squarely cover the issue so far ticking of these EDI shipping bills are concerned. Moreover, the Court cannot be oblivious of the fact that it was a time when software for online filing was merely introduced after converting port into EDI port and therefore, not only there is possibility of the technical glitch, but, the person in whose benefits this had been done also, may not be aware of the procedure and the manner of operation, which may have resulted into depending on some other agencies for committing mistake. And that, by no means can take away the right of the parties, more particularly, when in the manual shipping bills, they had categorically requested for grant of benefits of scheme and that leaves no room of doubt about the intent. Authority once can make out from manner shipping bills, they must not carry the mindset even with reiterative requests from the exporters to avail benefit of Scheme to deny such benefits on sheer technicality. 15.1 From the discussion above, we are of the firm opinion that the responden ..... 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