2025 (3) TMI 749 - HC - Customs

Amendment of Shipping Bill Allowed Under Section 149 of Customs Act; Court Orders Duty Drawback Refund

M/s. G.T. India Private Limited, Represented by its Director Arvind Doshi Versus The Commissioner of Customs (Exports), Chennai.

The HC ruled in favor of the petitioner, allowing the amendment of the shipping bill from a 'Free Shipping Bill' to a 'Shipping Bill for Claim for ... Amendment of Shipping bill from a “Free Shipping Bill” to a “Shipping Bill for Claim for Drawback” in respect of re-export of goods in terms of Section 149 of the Customs Act, 1962 - confiscation - penalty - HELD THAT:- The imported goods were not allowed to be taken outside the customs area and therefore the question of the imported consignments being re-examined once again before the reexport would have been merely a procedural formality as the Customs Department had already subjected the imported consignments of Black Pepper to test and had sent it for laboratory to comply with the provisions of the Food Safety and Standards Act, 2006. Since the goods have been reexported back, the procedural irregularities in complying with the requirements of the rules under the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995, cannot be pressed against the petitioner as the procedures are handmaids of justice and not mistress of law as held by the Hon'ble Supreme Court in State of Uttar Pradesh Vs Aurya Chambers of Commerce [1986 (4) TMI 363 - SUPREME COURT]. Conclusion - Since the goods having been exported without being cleared, the petitioner cannot be denied the substantial benefits that was available to the petitioner. The respondent is directed to refund the amount within a period of two (2) months from the date of receipt of a copy of this order - petition allowed. ISSUES PRESENTED and CONSIDEREDThe primary issues considered in this judgment were: Whether the petitioner is entitled to amend the shipping bill from a 'Free Shipping Bill' to a 'Shipping Bill for Claim for Drawback' under Section 149 of the Customs Act, 1962. Whether the petitioner is entitled to a refund of the customs duty paid, given that the goods were re-exported, in light of Article 265 of the Constitution of India. The applicability of procedural requirements under the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995, and whether non-compliance with these procedures can deny the petitioner the benefits of duty drawback.ISSUE-WISE DETAILED ANALYSISAmendment of Shipping Bill Relevant legal framework and precedents: Section 149 of the Customs Act, 1962 allows for the amendment of documents, including shipping bills, provided that the amendment is based on documentary evidence which was in existence at the time the goods were exported. Court's interpretation and reasoning: The Court noted that the procedural requirements should not overshadow substantive justice. The imported goods were not cleared for consumption and were re-exported, meaning that the procedural formality of re-examination was unnecessary. Key evidence and findings: The goods were subjected to a lab test under the Food Safety and Standards Act, 2006, and were found unfit for consumption. The petitioner complied with the order to re-export the goods. Application of law to facts: The Court applied the principle that procedural rules are meant to aid justice, not hinder it. Since the goods were re-exported, the petitioner should not be denied the opportunity to amend the shipping bill to claim drawbacks. Treatment of competing arguments: The respondent argued that a proper shipping bill should have been filed initially. However, the Court found that the requirement for re-examination was a mere formality, given the circumstances. Conclusions: The Court concluded that the petitioner is entitled to amend the shipping bill and claim the duty drawback.Refund of Customs Duty Relevant legal framework: Article 265 of the Constitution of India stipulates that no tax shall be levied or collected except by the authority of law. Court's interpretation and reasoning: The Court held that since the goods were re-exported and the petitioner complied with all conditions, denying a refund would be contrary to Article 265. Key evidence and findings: The petitioner paid customs duty on goods that were not cleared for domestic consumption and subsequently re-exported. Application of law to facts: The Court found that the duty paid was without legal authority once the goods were re-exported, thus entitling the petitioner to a refund. Treatment of competing arguments: The respondent did not provide a substantial argument against the refund other than procedural non-compliance, which the Court dismissed. Conclusions: The Court directed the respondent to refund the customs duty paid by the petitioner.Procedural Non-Compliance Relevant legal framework and precedents: The Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995, outline procedural requirements for claiming duty drawbacks. Court's interpretation and reasoning: Citing precedents, the Court emphasized that procedural rules should not defeat substantive rights. The petitioner had substantially complied with the requirements by re-exporting the goods. Key evidence and findings: The petitioner complied with the conditions set forth in the Order-in-Original, which included re-exporting the goods. Application of law to facts: The Court determined that the procedural irregularities were not significant enough to deny the petitioner the benefits of duty drawback. Treatment of competing arguments: The respondent's insistence on procedural compliance was deemed insufficient to override the petitioner's substantive rights. Conclusions: The Court allowed the petitioner's claim for duty drawback despite procedural non-compliance.SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: The Court stated, 'procedures are handmaids of justice and not mistress of law,' reinforcing the principle that procedural requirements should not impede substantive justice. Core principles established: The judgment reinforced the principle that procedural rules should not be used to deny substantive rights, especially when compliance with such procedures would not alter the outcome. Final determinations on each issue: The Court allowed the amendment of the shipping bill and directed the refund of the customs duty paid by the petitioner, emphasizing the importance of substantive justice over procedural technicalities.