Shipping bill conversion from Drawback to Advance Authorisation scheme allowed on remand under Board Circular 36/2010

CESTAT Bangalore allowed appeal by remand in a case involving conversion of shipping bill from Drawback scheme to Advance Authorisation scheme under Board Circular No. 36/2010. The adjudicating authority had rejected conversion request citing appellant's lack of diligence in maintaining records. CESTAT found no allegations of fraud, misdeclaration, or non-fulfillment of export promotion scheme conditions. The tribunal noted that when omissions were brought to appellant's notice, they verified and rectified records, indicating adequate diligence. The impugned order was set aside and matter remanded for de-novo adjudication with directions to consider produced documents and provide reasonable hearing opportunity.

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Issues involved:
The issues involved in the judgment include the appellant's request to convert shipping bill under drawback scheme to advance authorization scheme, the rejection of the request by the adjudicating authority based on Circular No. 36/2010 dated 23.9.2010, and the subsequent appeal filed by the appellant challenging the rejection.

Details of the Judgment:

1. The appellant, engaged in the manufacture and assembly of Spectacle Lens and industrial Metrology Equipment, imported "Semi Finished Spectacle lens" and manufactured spectacle lens for exporting from 2015 to 2020. They obtained advance authorizations during this period. The appellant decided to convert the business to 100% EOU and requested to convert shipping bill under drawback scheme to advance authorization scheme. The request was supported by relevant certificates from a Chartered Accountant and the GST authority confirming fulfillment of export promotion scheme conditions. The adjudicating authority rejected the request citing non-satisfaction of Circular No. 36/2010 conditions.

2. The learned counsel argued that the appellant fulfilled substantial export obligations despite the rejection based on Circular No. 36/2010. They cited a Kerala High Court judgment emphasizing that circulars cannot override statutory provisions. The counsel also referred to previous tribunal and high court decisions supporting conversion of shipping bills under various schemes.

3. The appellant provided documentary evidence, including certificates from a Chartered Accountant and the Central Tax Range Superintendent, to support their request for conversion. They highlighted previous decisions in similar cases to strengthen their argument for conversion.

4. The learned AR relied on judgments from various high courts to argue that amendments sought at a belated stage cannot be considered. However, the Tribunal found that the adjudicating authority did not adequately consider the documents produced by the appellant and the sustainability of Circular No. 36/2010 conditions.

5. The Tribunal set aside the impugned order rejecting the conversion request and remanded the issue for de novo adjudication. The adjudicating authority was directed to consider the appellant's documents and decide on the conversion request, ensuring a reasonable opportunity for a personal hearing.

6. The appeal was allowed by way of remand, emphasizing the need for a thorough review of the appellant's case for conversion of shipping bills under different schemes.

(Note: The summary provides a detailed overview of the judgment, highlighting the key arguments, legal principles, and decisions made by the Tribunal.)

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