Conversion of shipping bills to DFRC upheld where drawback benefit was denied and export goods met the scheme norms.

Shipping bills filed under the drawback scheme could be converted to the DFRC scheme where drawback benefit was denied, because the governing Board circular covered exporters who had chosen one export promotion scheme but were refused its benefit by Customs or DGFT. The goods were otherwise shown to be eligible for DFRC under the relevant norms, and the required certification was produced. A later amendment did not bar such conversion, and earlier precedent supported the same approach. Conversion was therefore allowable, the denial was unsustainable, and consequential relief followed.

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Issues: Whether shipping bills filed under the drawback scheme could be converted to the DFRC scheme when drawback benefit was denied, and whether the Board's circular permitted such conversion.

Analysis: The circular governing conversion of shipping bills contemplated two distinct situations: where an exporter was forced to file a free shipping bill, and where an exporter had filed under a particular export promotion scheme but the benefit of that scheme was denied by Customs or DGFT. The exporter's claim fell within the second category because drawback had been refused. The exported goods were also shown to be eligible for DFRC benefit under the relevant norms, and supporting certification was produced. The later amendment circular did not prohibit such conversion, and the Tribunal's earlier decision on similar facts supported the same view.

Conclusion: The request for conversion from the drawback scheme to the DFRC scheme was allowable and the denial of conversion was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief as permissible in law.

Ratio Decidendi: Where an exporter is denied the benefit of the scheme originally chosen, and the goods are otherwise eligible for the alternate scheme, a duly applicable Board circular permitting conversion of shipping bills supports conversion from one export promotion scheme to another.

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