Shipping bills can be converted from Drawback to ROSCTL scheme beyond circular deadline under Section 149

CESTAT NEW DELHI allowed appeal regarding conversion of shipping bills from Drawback scheme to Drawback and ROSCTL scheme beyond three-month circular deadline. Tribunal held that procedural time limits in circulars cannot override statutory provisions under Section 149 of Customs Act, which permits amendments based on documentary evidence existing at time of clearance. Since export goods were undisputed and examination levels for both schemes were identical, appellant's entitlement to scheme benefits could not be denied due to procedural lapse. Circular's liberalizing intent should facilitate scheme conversions rather than impose rigid restrictions not contemplated in parent statute.

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Issues Involved:
1. Conversion of Shipping Bills from Drawback (Scheme Code 19) to Drawback and ROSCTL (Scheme Code 60).
2. Time limit for amendment under Section 149 of the Customs Act.

Summary:

Issue 1: Conversion of Shipping Bills from Drawback (Scheme Code 19) to Drawback and ROSCTL (Scheme Code 60)

The appellant challenged the Order-in-Original dated 04.10.2021, which rejected their application for conversion of Shipping Bills from Drawback to Drawback and ROSCTL. The appellant cleared consignments under the Drawback Scheme due to a clerical error by their Customs Broker. Upon realizing the error, they applied for conversion, initially to the wrong authority, and then correctly to the Commissioner of Customs. The Commissioner rejected the application citing a three-month limitation period as per CBEC Circular No. 36/2010-Cus dated 23.09.2010.

Issue 2: Time limit for amendment under Section 149 of the Customs Act

The appellant argued that Section 149 of the Customs Act does not prescribe a time limit for amendments and that the CBEC Circular's three-month limit is without legal authority. The Tribunal noted that the issue of time limits under Section 149 has been settled in various decisions, which held that the statutory right to amend documents cannot be curtailed by circulars. The Tribunal cited several judgments, including K.G. Denim Ltd. and Visoka Engineering Pvt. Ltd., which support the view that no time limit is prescribed under Section 149 and that circulars cannot override statutory provisions.

The Tribunal found merit in the appellant's submission that the clerical error was bona fide and that the delay in applying for conversion was not unreasonable. The Tribunal emphasized that the benefit of the scheme cannot be denied due to procedural lapses, especially when the goods were eligible for the scheme at the time of export. The Tribunal concluded that the delay was not substantial enough to deny the benefit and that the conversion should be allowed.

The Tribunal set aside the impugned order and allowed the appeal, granting consequential relief as per law.

(Pronounced in open Court on 26th February, 2024)

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