TaxTMI 
TaxTMI 
2021 (3) TMI 240
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtiorari or a writ of mandamus or any other appropriate writ, order or direction quashing and setting O/O No.AHM­CUSTOM­000­COM­007­19020 dated 30.09.2019 passed by the Principal Commissioner of Customs, Ahmedabad, the 2nd respondent herein, with a direction to this respondent to pay drawback of Rs. 11,18,458/­ to the petitioner. (C) That Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ, direction or order directing the respondent No.2 herein to pay interest to the petitioner under Rule 14 of the Drawback Rules on the drawback amount of Rs. 11,18,458/­. (D) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to direct the 2nd respondent herein to pay to the petitioner principal amount of drawback aggregating to Rs. 11,18,458/­ on the terms and conditions that may be deemed fit by this Hon'ble Court. (E) An ex­parte ad­interim relief in terms of para 17(D) above may be kindly be granted; (F) Any other further relief as may be deemed fit in the facts and circumstances of the case may also please be granted." 2 The facts giving....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ills under Section 149 of the Customs Act. 2.8 The Commissioner of Customs, after giving an opportunity of hearing to the writ applicant, rejected the application preferred by the writ applicant on the ground that the CBEC in its circular No.36/2010 dated 23rd September 2010 in para 3(a) has provided that a request for conversion of the shipping bills should be made by the exporter within three months from the date of the Let Export Order (LEO) and as the request was beyond the time limit of three months, the benefits cannot be granted. 3. In view of the aforesaid, the writ applicant is here before this Court with the present writ application. 4. Mr. Paresh Dave, the learned counsel appearing for the writ applicant would submit that the legitimate export benefit has been denied only because the CBEC has provided by issuing the impugned circular that a request for conversion of the shipping bill should be made within 3 months from the date on which the good were allowed to be exported, however, this circular prescribing the time limit for the amendment of the export documents like the shipping bills are ultra vires Section 149 of the Customs Act, because Section 149 while p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orted and therefore the action of the 2nd respondent in rejecting the petitioner's request for such export benefits deserves to be set aside in the interest of justice. 6. According to Mr. Dave, the amendment of any documents issued under the Customs Act, including a shipping bill, is authorized under Section 149 of the said Act without any restriction of time limit. Such provision for amendment of documents has been made in the Act to avoid undue hardships and prejudice that may be caused to an importer or an exporter on account of filing or lodging of any document with incorrect or inaccurate information in respect of the import or export of any goods. Since it is human to err, a possibility of any incorrect or wrong information being reported inadvertently in any documents filed under the Act cannot be ruled out. It is for correcting such inadvertent and unintentional errors, and to obviate genuine difficulties of a bonafide person filing any documents under the Act, that the provision for amendment of documents has been provided. Such beneficial provision cannot be tinkered with, and the benefits flowing from such beneficial provision cannot be curtailed by the CBEC; by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he documents which are assessed by the proper Customs officer for the purpose of verifying whether the goods are prohibited for the import or export, as the case may be, and also the duties leviable thereon. By very nature of the assessment proceedings, such documents like a bill of entry, or a shipping bill or a bill of export can be effectively verified and assessed only when the goods were available for inspection, testing and analysis and verification of any other kind which would be ordinarily necessary for finalizing the classification of the goods and applicable duties thereon. If such documents are assessed and goods are allowed to be cleared for home consumption in case of imported goods or allowed to be cleared for export in case of export of goods, and subsequently a request for amendment of such documents is made and if such amendment could be made only upon verification of the good which would no longer be available with the Customs officers, only then the proviso to Section 149 does not authorize such amendment. 10. In such circumstances referred to above, Mr. Dave prays that there being merit in his writ application, the same be allowed and the reliefs, as prayed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as been represented to the Board that the norms for allowing conversion of shipping bills may be relaxed and the Commissioners should be allowed to consider requests for conversion of shipping bills from free to export promotion scheme and from one export promotion scheme to another on a case to case basis depending on the merits of the case. It has also come to notice of the Board that the Tribunals in a series of judgments have held that amendment to shipping bill after export of goods is governed by the proviso to section 149 of the Customs Act, 1962 and if the requirements of the said proviso are satisfied, conversion of shipping bill should be allowed, The conversion of the shipping bill from one scheme to another cannot be linked with denial of benefit of one scheme by DGFT/MoC&l or Customs due to some dispute as no such condition for amendment of shipping bill has been provided in section 149 of Customs Act, 1962. 3. The issue has been re­examined in light of the above. It is clarified that Commissioner of Customs may allow conversion of shipping bills from schemes involving more rigorous examination to schemes involving less rigorous examination (for example, f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ack Rules, 1995. 5. Due care may be taken while allowing conversion to ensure that the exporter does not take benefit of both the schemes i.e. the scheme to which conversion is sought and the scheme from which conversion is sought. Whenever conversion of a shipping bill is allowed, the same should be informed to DGFT so that they may also ensure that the exporter does not take benefit of both the schemes. 6. This Circular supersedes the Board Circular No. 4/2004­Cus., dated 16­1­2004 and the earlier Circulars issued in the past on this issue. This circular shall be applicable only to shipping bills filed on or after the date of issuance of this Circular. Till such time as EDI system is modified to allow conversion of shipping bill in the EDI system, conversion may be allowed manually. 7. A suitable Public Notice for information of the Trade and Standing Order for guidance of the staff may be issued. Difficulties faced, if any in implementation of the directions may be brought to the notice of the Board. Kindly acknowledge receipt of this Circular." 15. We must now look into few provisions of the Customs Act, 1962. Section 149 of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Messrs Gokul Overseas vs. Union of India [Special Civil Application No.7500 of 2019 decided on 21st January 2020] had the occasion to consider the very same issue at length. We quote the relevant observations: "20.6 Lastly, it was contended that section 149 of the Act does not provide for any period of limitation for amending the shipping bills. It was submitted that it was on account of the conduct of the respondent authorities in not deciding the issue in question that there was a delay in making the application for amendment of the shipping bills. It was, accordingly, urged that the petition deserves to be allowed by directing the respondents to amend the shipping bills by permitting the same to be converted into MEIS and grant the benefits thereof. 21. Opposing the petition, Mr. Nikunt Raval, learned senior standing counsel for respondents No.2, 3 and 5, invited the attention of the court to the Foreign Trade Policy 201520, whereby the MEIS came to be introduced. It was submitted that one of the prerequisites for claiming benefits under the said scheme in respect of Non­EDI shipping bills has been provided in para 3.14 of the Handbook of Procedure to the F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en otherwise, the petitioner is not entitled to the benefit in respect of some of the shipping bills, as they have been filed beyond the period of limitation. It was submitted that if the intention to avail benefits under the scheme is not declared in the shipping bills, the necessary process required for clearing the goods will be missed out. 21.4 It was, accordingly, urged that the mandate of the Circular dated 23.09.2010 for making application for conversion of shipping bills within a period of three months from the date of the Let Export Order cannot be waived and that the applications filed beyond the period of limitation have rightly been rejected by the respondent authorities. It was, accordingly, urged that the petition, being devoid of merits, deserves to be dismissed. 22. Mr. Nirzar Desai, learned senior standing counsel for respondents No.1, 4 and 6 submitted that the Customs Department is concerned with the amendment under section 149 of the Customs Act, 1962. It was submitted that the Circular dated 23.09.2010 provides that for the purpose of making amendment, the application should be made within a period of three months from the date of the Let Expo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP. (ii) Non­EDI Shipping Bills: In the case of non­EDI Shipping Bills, Export shipments would need the following declaration on the Shipping Bills in order to be eligible for claiming rewards under MEIS: "We intend to claim rewards under Merchandise Exports From India Scheme (MEIS)". Such declaration shall be required even for export shipments under any of the schemes of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP. (b) Whenever there is a decision during the financial year to include any new product/goods or new markets then to avail such rewards: (i) For exports of such products/goods, to such markets, a grace period of one month from the date of notification/public notice will be allowed for making this declaration of intent. (ii) After the grace period of one month, all exports (of such products/goods or to such markets) would have to include the declaration of intent on all categories of shipping bills. (iii) For exports made prior to date of notification/ public notice of products/markets, such a declaration would not be required since such ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd where the exporter has inadvertently marked "N" in the "reward item box" and wishes to seek MEIS benefits: Exporters shall submit physical copies of free shipping bills after electronic filing Of application to RA at the time of submission of application for MEIS rewards in these cases. RA shall grant MEIS rewards after examination of such shipping bills in accordance with other provisions of FTP/HBP. 4. From 01.06.2015, only those shipping bills, which are transmitted by Custom Authorities to DGFT, shall be considered under MEIS. Effect of this Public Notice: Shipping bills, where declaration of intent 'Y' has not been marked and 'N' has been ticked inadvertently in the 'reward item box' while filing shipping bill in Customs for exports made between 1.4.2015 to 31.5.2015, shall be transmitted by CBEC to DGFT." 26. Vide Public Notice No.47/20152020 dated 08.12.2015, the procedure prescribed vide Public Notice No.40 dated 09.10.2015 has been extended beyond 31.05.2015 for the period from 01.06.2015 to 30.09.2015. 27. From the facts and contentions noted above, it emerges that the petitioner is not permitted conversion of the shipping b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts or not. Therefore, till that time, its claim will be kept pending. Thus, the claim was kept pending by the concerned authorities. 30. Vide letter dated 06.06.2017, the petitioner requested the respondent No.4 - Commissioner of Customs, Kandla, to allow benefits under the MEIS on the shipping bills in case the 'declaration of intent' was not mentioned on exports made prior to 01.06.2015, whereupon the petitioner was advised/informed to comply with the amendment in the form of conversion of shipping bills from free to MEIS, whereafter, the petitioner applied for conversion of shipping bill. 31. Subsequently, vide communication dated 18/19.07.2017, the petitioner was informed that the shipping bills are required to be amended by the competent authority under section 149 of the Act and was requested to approach the proper officer of Customs under section 149 of the Act, whereupon the petitioner, on 01.08.2017, requested the competent authority to amend the shipping bills under section 149 of the Act at the earliest. 32. Thus, the respondents had not informed the petitioner immediately to get the shipping bills converted into one under the MEIS. It was only....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f benefit was introduced on 142008 through an amendment to the Handbook of Procedures. It is now settled law that the provisions of the Foreign Trade (Development & Regulation) Act, 1992, the rules or regulations framed thereunder and the export import policy have the force of law. Handbook of Procedures and the amendments carried out thereto are per se not declaration of law but only impose conditions which are to be fulfilled and otherwise conform to the requirements of law. Without making a deeper analysis of these legal provisions, the facts of this case reveal that the export goods are essentially agricultural produce and continued to be covered as an item eligible for benefit. At the time, just prior to 142008, the goods had been exported as free shipping bills. The exporter/appellant's fault here is that it did not file the requisite declaration. In all other respects, I.e. as to whether they conform to the description in the shipping documents and the value, etc. continues to be ascertainable because the concerned bills, invoices and other shipping documents are available with the customs authorities. 8. Having regard to these, we are of the opinion that in the pec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntinues to be ascertainable because the concerned bills, invoices and other shipping documents are available with the customs authorities. The respondents are, therefore, not justified in turning down the request to convert the shipping bills of the petitioner from free to MEIS and thereby depriving the petitioner of the benefits under the MEIS in respect of exports made under such shipping bills. 38. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. The impugned letter dated 11.02.2019 of the respondent No.2, Under Secretary, Government of India, is hereby quashed and set aside. The respondents are directed to permit the petitioner to convert the shipping bills in question from free shipping bills to MEIS shipping bills subject to the satisfaction of the competent authority. The respondents shall give effect to this order within two months from the date of receipt of copy of this order. Rule is made absolute accordingly, with no order as to costs." 22. In one of the recent pronouncements by a Coordinate Bench of this Court, in the case of M/s. Raj and Company vs. Union of India [Special Civil Application No.17804 of 2019 decided ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reads as under: "3.14 Procedure for Declaration of Intent on EDI and Non EDI shipping bills for claiming rewards under MEIS including export of goods through courier or foreign post offices using eCommerce: (a) (i) EDI Shipping Bills: Marking/ticking of "Y" (for Yes) in "Reward" column of shipping bills against each item, which is mandatory, would be sufficient to declare intent to claim rewards under the scheme. In case the exporter does not intend to claim the benefit of reward under Chapter 3 of FTP exporter shall tick "N' (for No). Such marking/ticking shall be required even for export shipments under any of the schemes of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP. (ii) Non­EDI Shipping Bills: In the case of non­EDI Shipping Bills, Export shipments would need the following declaration on the Shipping Bills in order to be eligible for claiming rewards under MEIS: "We intend to claim rewards under Merchandise Exports From India Scheme (MEIS)". Such declaration shall be required even for export shipments under any of the schemes of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP. (b) Whenever there is a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tory declaration of intent from 1.6.2015 onwards. In EDI generated shipping bills, exporters are required to tick mark "Y" in case they intend to claim benefits under MEIS and "N" in case they do not intend to claim benefit under MEIS. 3. In light of these circumstances and to address the matter, in exercise of powers conferred under paragraph 1.03 of the Foreign Trade Policy (20152020) read with reference to para 3.14 of Handbook of Procedures of FTP 201520, the Director General of Foreign Trade hereby allows the following procedure to be followed where exports have been made between 1.4.2015 to 31.5.2015, and where the exporter has inadvertently marked "N" in the "reward item box" and wishes to seek MEIS benefits: Exporters shall submit physical copies of free shipping bills after electronic filing Of application to RA at the time of submission of application for MEIS rewards in these cases. RA shall grant MEIS rewards after examination of such shipping bills in accordance with other provisions of FTP/HBP. 4. From 01.06.2015, only those shipping bills, which are transmitted by Custom Authorities to DGFT, shall be considered under MEIS. Effect o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....In this case, the petitioner applied for the MEIS for the exports made during the period April 2015 to January 2016, under separate applications. The said applications were partly allowed and twenty five shipping bills were disputed. Vide letter dated 03.08.2016, the petitioner was informed by the respondent No.5 - Development Commissioner, that since there is no 'declaration of intent' on the shipping bills for claiming benefits under the MEIS, a reference has been sent to the respondent No.3 DGFT for a clarification whether such shipping bills (Non-EDI) prior to 01.06.2015 were eligible for benefits under the MEIS benefits or not. Therefore, till that time, its claim will be kept pending. Thus, the claim was kept pending by the concerned authorities. 30. Vide letter dated 06.06.2017, the petitioner requested the respondent No.4 - Commissioner of Customs, Kandla, to allow benefits under the MEIS on the shipping bills in case the 'declaration of intent' was not mentioned on exports made prior to 01.06.2015, whereupon the petitioner was advised/informed to comply with the amendment in the form of conversion of shipping bills from free to MEIS, whereafter, the petitioner app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dia (Agencies) Pvt. Ltd. v. Commissioner of Customs, 2017 (348) ELT 634 (Del.), on which reliance has been placed by the learned advocate for the petitioner, wherein the question that arose for consideration was: "Did the CESTAT fall into error in upholding the denial of the petitioner's claim for amendment of its shipping document under section 149 of the Customs Act." The court held thus: "7. In the present case, the appellant had been consistently dealing with the same goods and exporting them previously for over three years. The precondition of a declaration along with the relative forms, for grant of benefit was introduced on 142008 through an amendment to the Handbook of Procedures. It is now settled law that the provisions of the Foreign Trade (Development & Regulation) Act, 1992, the rules or regulations framed thereunder and the export import policy have the force of law. Handbook of Procedures and the amendments carried out thereto are per se not declaration of law but only impose conditions which are to be fulfilled and otherwise conform to the requirements of law. Without making a deeper analysis of these legal provisions, the facts of this case reveal that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....yond the time prescribed in Circular No.36/2010-Customs dated 23.09.2010, no other objection has been raised on behalf of the respondents. In the opinion of this court, having regard to the peculiar facts of the present case, the omission to file 'declaration of intent' when all other relevant material is available, is not fatal to the petitioner's case. As in the case of Kedia (Agencies) Pvt. Ltd. v. Commissioner of Customs (supra), in the facts of the present case also, in all other respects, that is, as to whether the goods conform to the description in the shipping documents and the value, etc. continues to be ascertainable because the concerned bills, invoices and other shipping documents are available with the customs authorities. The respondents are, therefore, not justified in turning down the request to convert the shipping bills of the petitioner from free to MEIS and thereby depriving the petitioner of the benefits under the MEIS in respect of exports made under such shipping bills. 38. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. The impugned letter dated 11.02.2019 of the respondent No.2, Under Secretary, Government....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s High Court, this has to be construed as pure and simple mistake on the part of the exporter, when otherwise the respondent has not questioned any of the shipping bills and it is only because the declaration of intent on the said shipping bills for claiming the benefits under the MEIS, the subsequent claim made by him on the EDI is questioned on the ground that Section 149 of the Customs Act would not be applicable. 15. We are of the opinion that the decisions which have been discussed hereinabove coupled with the very object of the MEIS would not allow us to endorse to the stand taken by the respondent authority, even if, the subsequent notices, which have been relied upon for denying the benefits by virtue of the communication dated 10.06.2019 do not prescribe the time limit, the reasonable time could be regarded as this request is made at the end of one year. 16. We also agree with the submissions made by the learned advocate for the petitioner that Section 149 of the Customs Act, 1962 which has been taken recourse to by the petitioner does not prescribe any time limit. It is a discretion of the concerned officer, which can authorize any document after it has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rules is physically impossible deserves to be taken into account. ...........". 24. In the case on hand, the request is for conversion of the EPCG shipping bill into the EPCG­cum­Drawback shipping bill, for Drawback at all India rate of 1.5% of value of the exported goods. 25. Under Rule 3 of the Drawback Rules, a Drawback is allowed on the export of goods at such amount, or at such rates, as may be determined by the Central Government. Such rates determined by the Central Government are called "All industry rate", because Drawback at such rates is allowed to all the exporters in the country without any conditions. This is because all the industry rates are determined by the Central Government on the basis of the general data collected from the industry about utilization of duty paid inputs, input services etc. While allowing such All industry rate of Drawback, no verification of the exported goods is required, and hence no verification is undertaken also by the Custom authorities. But there may be cases where the rate of Drawback has not been determined, and such cases are covered under Rule 6. Where no All India rate of Drawback is determined in respect of any goods....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een claiming Drawback at the special brand rate, then the amendment of shipping bills by allowing conversion into Drawback shipping bill may not be possible only on the basis of the documentary evidence which was in existence at the time the goods were cleared for export. For fixing brand rate, examination of the goods and also verification of the goods as well as inputs, raw materials, input services etc. used for such goods would be necessary; and such verification would be impossible once the goods have been exported. But for Drawback at All industry rate, the only requirement would be to consider the export documents where the description, quantity and value of the goods have been recorded, and verified as well as assessed by the Custom Officers while allowing clearance of the goods for export. On the value so assessed by the Custom officers, the calculation of Drawback at All industry rate is only an arithmetical exercise, which could be easily done on the basis of the documentary evidence (i.e. the export documents like shipping bill and export invoice) which was in existence when the goods were cleared for export. 28. The judgement of the Delhi High Court is for a case wh....