Tribunal grants MEIS benefits after finding Customs denial contrary to law

The Tribunal set aside the Customs Commissioner's denial of converting shipping bills to Advance License shipping bills for MEIS benefits, finding it contrary to Section 149 of the Customs Act, 1962. The appellant's request, supported by evidence of fulfilling export obligations, was deemed valid under Circular No. 36/2010. The Tribunal ruled in favor of the appellant, granting the conversion and consequential benefits.

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Issues:
Denial of benefit of conversion of shipping bills into advance license shipping bills.

Analysis:
The appellant, a manufacturer of motorized curtains and blinds assemblies, imported goods under an Advance Authorization License for use in manufacturing goods for export. The appellant intended to avail benefits under the Merchandise Export Incentive Scheme (MEIS) but failed to mention that exports were made against the obligation under the Advance License. A request was made to convert shipping bills to Advance License shipping bills, supported by the fact that goods were manufactured using imported goods and exported to fulfill obligations. The Principal Commissioner of Customs rejected the request, citing non-satisfaction of Section 149 of the Customs Act, 1962, and referred to a decision of the Hon'ble Delhi High Court in Terra Films Pvt. Ltd. case.

The appellant argued for conversion based on the provisions of Section 149 allowing amendments to documents, subject to prescribed conditions. The Circulars referred to in the impugned order prescribed conditions for amendment after export, requiring documentary evidence at the time of export, request within 3 months of export, examination reports, and fulfillment of export promotion scheme conditions. The authorities' failure to conduct physical examination cannot be attributed to the appellant, as the shipping bills clearly declared intent for MEIS benefits. The level of examination for MEIS exports was the same as for exports under EPCG/DEEC schemes, supporting conversion under Circular No. 36/2010.

The Tribunal found the denial of benefit unacceptable, not in line with Section 149, and set aside the impugned order, allowing the appeal with consequential benefits. The decision was pronounced in the Open Court on 01/04/2022.

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