Advance Authorisation Scheme: Shipping bill misdescription will not defeat entitlement after drawback refund with interest.

A technical misdescription in shipping bills did not, by itself, defeat entitlement under the Advance Authorisation Scheme where the exports had been examined by customs and the let export order had been issued. The court noted that the only error was mentioning the Duty Drawback Scheme instead of the Advance Authorisation Scheme, and no material showed that any essential requirement had escaped the earlier examination. On the exporter refunding the drawback amount with interest, the objection based on the circular was held not to bar treatment of the exports under the Advance Authorisation Scheme or a fresh determination by the DGFT on export obligation compliance and the Export Obligation Discharge Certificate.

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Issues: Whether shipping bills wrongly filed under the Duty Drawback Scheme could be treated as shipping bills under the Advance Authorisation Scheme after refund of drawback with interest, and whether the appellant was entitled to have the export obligation examined for grant of an Export Obligation Discharge Certificate.

Analysis: The appellant had imported inputs duty-free under the Advance Authorisation Scheme and had exported the finished products through shipping bills that had passed customs examination and received the let export order. The error was limited to mentioning the Duty Drawback Scheme instead of the Advance Authorisation Scheme. The Court found no material to show that any crucial aspect required for the Advance Authorisation Scheme had escaped the earlier customs examination. Since the appellant undertook to refund the drawback amount with interest, the technical objection based on the circular was held not to be a bar to treating the exports as exports under the Advance Authorisation Scheme and to a fresh determination by the DGFT on export obligation compliance.

Conclusion: The issue was answered in favour of the appellant, and the customs authorities were directed to accept refund of drawback with interest, after which the DGFT was to consider the shipping bills under the Advance Authorisation Scheme and decide the request for the Export Obligation Discharge Certificate.

Ratio Decidendi: A technical misdescription in shipping bills will not defeat substantive entitlement under the Advance Authorisation Scheme where the goods were exported after customs examination, no prejudice from the earlier examination is shown, and the drawback received is refunded with interest.

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