2024 (4) TMI 446 - HC - Customs

Customs must allow Bill of Entry amendments for IGST payments under Advanced Authorisation and EOU schemes

The Kerala HC allowed writ petitions challenging refusal to amend Bills of Entry for imported goods under Advanced Authorisation and EOU schemes. ... Refund of IGST on Export of Goods - Conditions were complied with post-export - Amendment of Bills of Entry for imported goods under the Advanced Authorisation Scheme and the Export-Oriented Unit (EOU) Scheme - A significant bone of contention was whether Bills of Entry could be amended post-clearance to reflect IGST payments - HELD THAT:- The Central Board of Indirect Taxes and Customs (CBIC), relying on the difficulty faced by the importers in amending the Bill of Entry despite payment of IGST and compensation cess, had issued notification Circular No.16/2023 and provided a separate procedure for amending the Bill of Entry inspite of second proviso to section 149. The office of Principal Commissioner of Customs, Maharashtra had issued public notice dated 23rd February 2024 for amending the Bills of Entry as per the procedure prescribed in different scenarios mentioned in the said public notice. In view of the notification No.78/2017-Customs dated 13th October 2017 and the public notice, the stand of the respondents that the Bills of entry cannot be allowed to be amended as the petitioners have not paid the IGST at the time of clearance of the imported goods and as a Bill of entry can be amended only on the basis of the documents available at the time of clearance of the goods, does not hold a valid ground for rejecting amendment of the Bill of Entry. Rejecting the application for amendment of the Bills of Entry despite payment of IGST and interest except in Writ Petition No.4670 of 2024 where the interest has not been paid cannot be countenanced. Further, as noted, except for the petitioner in Writ Petition, the Commissioner of Customs vide order dated 4th March 2022 directed the petitioners to deposit the IGST along with interest for all the Bills of Entry for which erroneous refund was availed under Rule 96(10) of the CGST Rules, 2017 and submitted the report after making payments. Out of the 12 entities who were directed to remit the amount of IGST along with interest, in the case of two entities, the Bills of Entry have been amended. However in the case of the petitioners, amendment to the Bills of Entry have been refused. There is no explanation coming forth from the respondents for choosing a few to allow them to amend the bills of entries and denying the same relief to others. Therefore, the petitions are to succeed, and thus, allowed. Respondents are directed to amend the bills of Entry of the petitioners. The petitioner in the Writ Petition is directed to pay the interest, if already not paid, within a period of 15 days from today and on the payment of interest and verification of the documents of payment of IGST and interest, the Bills of Entry should also be amended. Thus, the Writ Petitions stand allowed. Issues Involved:1. Amendment of Bill of Entry u/s 149 of the Customs Act, 1962.2. Payment of IGST and its implications on refunds under the CGST/IGST Act and Rules.3. Applicability of Circular No.16/2023 and related judgments.4. Discretionary power of the customs authority to amend documents post-clearance.Summary:Issue 1: Amendment of Bill of Entry u/s 149 of the Customs Act, 1962WPC No.5394 of 2024 The petitioner, engaged in manufacturing and exporting coir products, sought amendment of the Bill of Entry after paying IGST and interest. The 4th respondent declined the request, citing that amendments post-clearance are not permissible except based on pre-existing documentary evidence. The petitioner argued that the Supreme Court in ITC Ltd. v. Commissioner of Central Excise, Kolkata [2019 KHC 6932] allowed such amendments under Section 149.WPC No.4670 of 2024 The petitioner, a 100% Export Oriented Private Limited Company, faced similar issues. Despite paying IGST through TR6/Manual challans, their request for amending Bills of Entry was denied. The petitioner cited the Telangana High Court's judgment in Sony India Pvt. Ltd. v. Union of India, which supports amendments under Section 149.WPC No.12195 of 2024 The petitioner, importing cement, sought amendment of the Bill of Entry to correct IGST calculation based on CIF value. The request was rejected despite payment of differential IGST and interest.WPC No. 6090 of 2024 The petitioner, engaged in manufacturing and export, paid IGST and interest but was denied amendment of Bills of Entry. The petitioner argued that Section 149 allows amendments based on pre-existing documentary evidence.Issue 2: Payment of IGST and its Implications on RefundsWPC No.5394 of 2024 The petitioner paid IGST and interest post-clearance and sought amendment to regularize IGST refunds on exports. The 4th respondent denied the amendment, leading to a show cause notice demanding recovery of ineligible IGST refunds.WPC No.4670 of 2024 The petitioner faced a similar situation where IGST was paid through manual challans, but the system did not auto-populate this in GSTR-2A/2B, leading to a mismatch and subsequent show cause notice demanding recovery of IGST refunds.WPC No. 6090 of 2024 The petitioner paid IGST and interest and sought amendment to regularize IGST refunds. The 2nd respondent issued a show cause notice demanding recovery of ineligible IGST refunds.Issue 3: Applicability of Circular No.16/2023 and Related JudgmentsThe petitioners cited Circular No.16/2023, which provides procedures for amending Bills of Entry where IGST was levied in violation of import conditions. The Telangana High Court's judgment in Sony India Pvt. Ltd. v. Union of India and the Bombay High Court's judgment in Dimension Data India Pvt. Ltd. v. Commissioner of Customs supported the petitioners' claims for amendments under Section 149.Issue 4: Discretionary Power of Customs AuthorityThe respondents argued that amendments post-clearance are not permissible under Section 149, except based on pre-existing documentary evidence. The petitioners countered that the customs authority has discretionary power to amend documents under Section 149 and Section 154, supported by judgments from the Telangana and Bombay High Courts.Conclusion:The court allowed the petitions, directing the respondents to amend the Bills of Entry. The petitioner in WPC No.4670 of 2024 was instructed to pay the interest within 15 days, following which the Bills of Entry should be amended. The court emphasized that the customs authority has the discretionary power to amend documents post-clearance under Section 149, supported by relevant judgments and Circular No.16/2023.