2021 (4) TMI 29 - HC - Customs

Court Orders Extension of Duty Credit Scrips and Benefits for Writ-Applicant

The court allowed the writ-application, directing the respondents to: 1. Revoke the suspension of the Duty Credit Scrips and extend their validity. 2. ... Revocation of suspension of the Duty Credit Scrips - MEIS - exported goods from a non- EDI port - return of said Duty Credit Scrips to the petitioner after extending the validity thereof for a period of 18 months from the date of such return of the said Duty Credit Scrips - issuance of petitioner Duty Credit Scrips under the provisions of the Merchandise Exports from India Scheme in the Foreign Trade Policy - HELD THAT:- In the present case, the authorities had themselves sought clarification from the DGFT as to whether such declaration was mandatory prior to 1.6.2015 and were awaiting such clarification. The authorities had even issued three scrips to the writ-applicant against six of its applications, which were later suspended while awaiting such clarification. Hence, it is not correct to blame the writ-applicant for not having sought amendment immediately. Unlike in other cases, in the present case, no authority issued any communication to the writ-applicant to seek amendment of the shipping bills under Section 149 of the Customs Act, 1962. Even the letters addressed by the respondents in August 2018, asking to remove the deficiency, did not specify that the writ-applicant would have to seek amendment under Section 149 of the Customs Act, 1962 - the writ-applicant cannot be said to have delayed, when the issue, whether or not the declaration was required prior to 1.6.2015 was under consideration by the authorities and when the authorities themselves have never asked the writ-applicant to amend the shipping bills under Section 149 of the Customs Act, 1962, and have only asked to remove the defect and that too as late as in August 2018. There is no dispute that the writ-applicant is eligible to claim the benefits under the MEIS since it has admittedly exported the notified goods to the notified countries as per the scheme of the MEIS - The writ-applicant has been exporting the very same goods prior to the Foreign Trade Policy, 2015-20, and claiming the benefits under the then extant Focus Market Scheme (FMS) and has subsequently also exported the very same goods and claimed the benefits under the MEIS scheme. It would be extremely unfair and unjust not to extend the benefits of the MEIS to the writapplicant on the ground that it had exported goods from a non- EDI port - Application allowed. Issues Involved:1. Revocation of suspension of Duty Credit Scrips.2. Issuance of Duty Credit Scrips under the Merchandise Exports from India Scheme (MEIS).3. Amendment of shipping bills to include the declaration for MEIS benefits.4. Procedural and technical lapses in the declaration of intent for claiming MEIS benefits.5. Legal validity of time limits imposed by Circular No.36/2010 under Section 149 of the Customs Act, 1962.Detailed Analysis:1. Revocation of Suspension of Duty Credit Scrips:The writ-applicant sought the revocation of the suspension of Duty Credit Scrips issued under the MEIS scheme, arguing that the suspension was based on a procedural lapse regarding the declaration of intent on shipping bills. The court noted that the writ-applicant was eligible for MEIS benefits as it had exported notified goods to notified countries. The suspension was deemed arbitrary and unreasonable, especially since the authorities had initially issued the scrips understanding that the declaration was not mandatory for the period in question.2. Issuance of Duty Credit Scrips under MEIS:The writ-applicant requested the issuance of Duty Credit Scrips for its applications, which were denied due to the absence of the MEIS declaration on shipping bills. The court held that the requirement for such a declaration was procedural and not mandatory. The authorities had the power to grant relaxation and had done so for EDI ports. The court found it discriminatory to deny similar relaxation for non-EDI ports.3. Amendment of Shipping Bills:The writ-applicant sought permission to amend the shipping bills to include the MEIS declaration. The court referenced Section 149 of the Customs Act, 1962, which permits amendments based on existing documentary evidence at the time of export. The court found no statutory time limit for such amendments and deemed the procedural lapse curable. The court also noted that previous judgments allowed amendments and directed the authorities to permit the amendment of the shipping bills.4. Procedural and Technical Lapses:The court analyzed the procedural lapse of not including the MEIS declaration on shipping bills. It was noted that the declaration was for internal convenience and not a substantive requirement. The court emphasized that procedural lapses should not result in the denial of substantive benefits, especially when the writ-applicant had complied with all other requirements and had been exporting the same goods under previous schemes.5. Legal Validity of Time Limits Imposed by Circular No.36/2010:The respondents argued that the amendment request was delayed and hit by the three-month time limit prescribed by Circular No.36/2010. The court, however, held that Section 149 of the Customs Act, 1962, did not prescribe any time limit and a subordinate legislation (circular) could not impose restrictions beyond the parent statute. The court referenced previous judgments that invalidated the circular's time limit and upheld the writ-applicant's right to seek amendment without being constrained by the circular's time limit.Conclusion:The court allowed the writ-application, directing the respondents to:1. Revoke the suspension of the Duty Credit Scrips and extend their validity.2. Issue Duty Credit Scrips for the writ-applicant's pending applications.3. Permit the amendment of shipping bills to include the MEIS declaration.The court emphasized that the writ-applicant should not be denied benefits due to procedural lapses and directed the authorities to complete the necessary actions within eight weeks.