Appeal allowed: Conversion of shipping bills permitted under statutory provisions

The Tribunal allowed the appeal, setting aside the rejection of the request for conversion of free shipping bills to advance authorization shipping bills. It held that statutory provisions prevail over circulars, emphasizing that procedural amendments should be permitted when supported by documentary evidence existing at the time of export. The Tribunal concluded that the rejection was unjustified and granted consequential relief to the appellant.

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Issues Involved:
1. Rejection of request for conversion of free shipping bills to advance authorization shipping bills.
2. Time limit for filing an application for conversion of shipping bills.
3. Requirement of physical examination of goods for conversion of shipping bills.

Detailed Analysis:

Issue 1: Rejection of Request for Conversion of Free Shipping Bills to Advance Authorization Shipping Bills

The appellant exported "Paint for Fire Proofing" under two shipping bills, mistakenly indicating the scheme code as "00" (free shipping bill) instead of "01" (advance authorization). They sought to amend the shipping bills to reflect the correct scheme. The Commissioner rejected this request based on Board Circular No. 36/2010, which prohibits the conversion of free shipping bills to export promotion scheme shipping bills. The appellant argued that the first page of the shipping bills and the export invoices clearly indicated the export was under advance authorization, and the mistake was inadvertent.

Issue 2: Time Limit for Filing an Application for Conversion of Shipping Bills

The appellant’s request was also rejected on the grounds of exceeding the three-month time limit prescribed by the Board Circular No. 36/2010. However, the appellant contended that Section 149 of the Customs Act, 1962, which governs the amendment of shipping bills, does not stipulate any time limit. The Tribunal and the Hon'ble High Court of Kerala have previously held that statutory provisions prevail over circulars, and thus, the time limit in the circular cannot override the statute. The Tribunal cited previous judgments (Autotech Industries (India) Pvt. Ltd. and Contemporary Leather Pvt. Ltd.) supporting this view.

Issue 3: Requirement of Physical Examination of Goods for Conversion of Shipping Bills

The request was further rejected because the goods were not physically examined, as they were filed under free shipping bills. The appellant argued that Section 149 does not require physical examination for amendments and that the necessary documents proving the goods were exported under advance authorization were provided. The Tribunal noted that the documents indicated the goods were exported under advance authorization, and the mistake was inadvertent. The Tribunal referenced the case of Autotech Industries (India) Pvt. Ltd., where it was held that amendments are procedural and should be allowed if the documents establish an inadvertent mistake without fraud or misstatement.

Conclusion:

After reviewing the facts and evidence, the Tribunal concluded that the rejection of the request for conversion was unjustified. The impugned order was set aside, and the appeal was allowed with consequential relief. The Tribunal emphasized that statutory provisions must prevail over circulars and that procedural amendments should be permitted when supported by documentary evidence existing at the time of export. The judgment was pronounced in open court on 16.02.2022.

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