Exporters' Right Upheld: Conversion of EPCG Shipping Bills Allowed

The Tribunal allowed the appeal, permitting the conversion of EPCG shipping bills to EPCG cum Drawback shipping bills. It held that lack of coordination and ignorance of provisions were insufficient grounds for rejecting the conversion request. The decision emphasized exporters' entitlement to seek such conversion, citing relevant case law and Circulars. The appellants' appeal was granted with consequential relief as per law.

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Issues: Request for conversion of shipping bills from EPCG scheme to drawback cum-EPCG scheme; Eligibility for drawback under CH 52,501; Interpretation of EPCG scheme provisions; Rejection of conversion request based on lack of coordination and ignorance of provisions.

Analysis:

The case involved the appellants filing 23 shipping bills under the EPCG scheme and subsequently requesting conversion to drawback cum-EPCG scheme. The Assistant Commissioner of Customs rejected the conversion request citing lack of substantive reasons beyond the exporter's control. The matter was remanded by the Commissioner (Appeals) to the adjudicating authority, who, in denovo adjudication, rejected the conversion request. The appellants appealed to the Tribunal challenging this decision.

During the hearing, the appellant's counsel argued that the exporter's intention to claim drawback was evident from the export process, despite a clerical mistake on the shipping bills. The counsel referenced a Supreme Court case and CBEC Circular to support the claim that conversion was not necessary for claiming All Industry Rate of Drawback. The appellants also relied on various judgments to argue in favor of permitting the conversion of EPCG shipping bills to EPCG cum Drawback shipping bills.

On the other hand, the respondent reiterated the findings of the impugned order during the hearing. The Tribunal heard both sides and examined the records. It noted that the EPCG scheme allows duty-free import of capital goods for specified exports within a timeframe, without barring simultaneous drawback on exported goods. The Tribunal found the grounds for rejecting the conversion request by the adjudicating authority to be insufficient, as lack of coordination and ignorance of provisions were not valid reasons to deny the conversion. Relying on the case laws cited by the appellant's counsel, the Tribunal set aside the impugned order, allowing the appeal with consequential relief as per law.

In conclusion, the Tribunal's decision highlighted the entitlement of exporters to seek conversion of zero duty EPCG shipping bills to zero duty EPCG cum drawback scheme shipping bills. The rejection of the conversion request based on lack of coordination and ignorance of provisions was deemed unsustainable, leading to the appeal being allowed in favor of the appellants.

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