Drawback shipping bill conversion and declaration relaxation allowed where non-claim was beyond the exporter's control.

Free shipping bills may be converted into drawback shipping bills, and the drawback declaration requirement relaxed, where the exporter shows that non-claim was due to reasons beyond its control and the claim concerns All Industry Rate drawback. Applying Rule 12(1)(a) of the Customs and Central Excise Duties Drawback Rules, 1995 and the Board circular, the facts that the exporter was pursuing DFRC issuance and was later removed from the Denied Entity List supported such a finding. The rejection was therefore unsustainable, and the matter was remitted to the Commissioner of Customs for fresh merits-based consideration under the circular.

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Issues: Whether the exporter was entitled to conversion of free shipping bills into drawback shipping bills and exemption from the declaration requirement on the ground that non-filing of the drawback declaration was for reasons beyond its control.

Analysis: The relevant framework consisted of Rule 12(1)(a) of the Customs and Central Excise Duties Drawback Rules, 1995 and the Board circular clarifying that relaxation could be granted on merits for claims of All Industry Rate drawback where the exporter satisfies the jurisdictional Commissioner that the claim was not made for reasons beyond control. The material showed that the exporter had been pursuing DFRC issuance, had been placed in the Denied Entity List because export obligation discharge certificates had not been furnished, and obtained revocation only later. On those facts, the non-filing of the drawback declaration was treated as attributable to circumstances beyond the exporter's control.

Conclusion: The rejection of the request could not be sustained and the matter was remitted to the Commissioner of Customs for fresh consideration on merits in terms of the circular; the appeal was allowed by way of remand.

Ratio Decidendi: Conversion of free shipping bills into drawback shipping bills may be permitted, and the declaration requirement relaxed, where the exporter establishes that the omission to claim drawback was for reasons beyond its control and the claim is for All Industry Rate drawback.

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