DEPB shipping bill conversion permitted where free shipping bills were filed after an earlier DGFT refusal and later eligibility was clarified.

Free shipping bills could be converted into DEPB shipping bills where the exporter had filed them after an earlier DGFT clarification, later reconsidered, indicated that soyabean de-oiled cake was covered by the relevant SION entry and eligible for DEPB benefit. That later clarification was treated as clarificatory rather than a change in law, because the entry description and governing position remained the same. Board Circular No. 40/2003-Cus. permitted conversion on merits where free shipping bills had been filed because DEPB benefit was refused by Customs or DGFT, subject to the stated conditions. On that basis, the conversion request was within the permitted scheme and denial of conversion was unsustainable.

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Issues: Whether free shipping bills could be converted into DEPB shipping bills where the exporter had filed free shipping bills because of an earlier DGFT clarification, which was later reconsidered and the goods were held eligible for DEPB benefit.

Analysis: The later DGFT view treated soyabean de-oiled cake as covered by the relevant SION entry and therefore eligible for DEPB. That clarification was treated as having clarificatory effect, since there was no change in the entry description or the governing legal position. The Board's Circular No. 40/2003-Cus. permitted conversion of free shipping bills into DEPB shipping bills on merits where the exporter had been forced to file free shipping bills because the benefit was refused by Customs or DGFT, subject to the stated conditions. The request therefore fell within the permissive scheme recognised by the Board, and the conversion was not barred merely because the original exports had already been made.

Conclusion: The conversion of free shipping bills into DEPB shipping bills was justified and the denial of such conversion was unsustainable.

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