DEPB shipping bill conversion denied for failure to meet mandatory scheme conditions and non-retrospective port eligibility rules.

Conversion of free shipping bills into DEPB shipping bills was refused because the claimant had not satisfied the scheme's substantive conditions. Compliance with the notification, public notice and circular requirements was mandatory, and the later policy circular did not authorise Customs to grant conversion where none had already been allowed. Exports through Porbandar before it became a specified DEPB port were ineligible, and the later notification could not operate retrospectively. The remaining claims also failed for non-compliance with essential requirements such as proper officer assessment, timely filing, and prescribed markings and particulars. The rejection of conversion and denial of DEPB benefit were upheld.

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Issues: (i) Whether free shipping bills could be converted into DEPB shipping bills and the DEPB benefit granted despite non-fulfilment of the prescribed conditions.

Analysis: The entitlement to DEPB benefit depended on compliance with the notification, public notice and circular requirements governing exports under the scheme. The Policy Circular dated 1.11.2011 applied only where conversion had already been allowed by Customs authorities, and it did not authorise Customs to permit conversion. The Tribunal further held that exports through Porbandar prior to 22.4.97 could not qualify for DEPB benefit because the port was not then a specified DEPB port, and the subsequent notification could not be given retrospective effect. For the remaining bills, the mandatory conditions were not met, including assessment by an officer not below the rank of Assistant Commissioner, timely filing of shipping bills, and the prescribed marking and particulars for DEPB claims. These were treated as substantive requirements, not curable irregularities.

Conclusion: Conversion of the free shipping bills into DEPB shipping bills was rightly refused and the assessee was not entitled to the claimed DEPB benefit.

Final Conclusion: The appeals failed because the prescribed DEPB conditions were not satisfied and the impugned rejection of conversion was upheld.

Ratio Decidendi: A request to convert free shipping bills into DEPB shipping bills can be refused where the claimant has not complied with the substantive requirements of the DEPB scheme and the later relaxation or policy circular does not authorise conversion that was never granted by Customs.

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