TaxTMI 
TaxTMI 
2024 (2) TMI 1634
X X X X Extracts X X X X
X X X X Extracts X X X X
....n in terms of Para 4 of Circular No. 36/2010-Cus, dtd. 23.09.2010 cannot be allowed." 2.1 Appellant is manufacturer and exporter of paper and paper products classifiable under Chapter 48. 2.2 GST was introduced with effect from 01.07.2017. Due to ignorance and confusion during the period from 01.07.2017 to 01.08.2018 they have exported their goods against free shipping bills. 2.3 For the period prior to and post the above stated period they had exported their goods under claim of drawback by filing the Drawback Shipping Bills. Drawback has been allowed in respect of these shipping bills. 2.4 Appellant made a request on 07.12.2019 to the jurisdictional Assistant Commissioner for conversion of free shipping bills filed during the afore stated period to drawback shipping bills in terms of Section 149 of the Custom Act, 1962. They also filed the similar request before the Commissioner on 21 December, 2020. 2.5 The request made was rejected by the Commissioner by the order in original No 01/Tech/2021 dated 10.02.2021 without affording any opportunity for hearing to the appellant. 2.6 Against this order rejecting the request made for conversion/ amendment in the shippin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the one under the claim of Drawback, which was albeit post-facto, with all the documents, during the period 01.07.2017 till 01.08.2018, well addressed and with the Customs in their record files. ➢ After the order of CESTAT, the representation were filed on 20.09.2023 21.10.2023 and 04.12.2023 respectively, by the Appellants seeking remedy under Section 149 of the Customs Act, 1962, for the amendment of documents. They inter-alia submitted that: ○ prior to the levy of GST, factory stuffing was done, during the levy of GST, even then stuffing was done within the factory, and sporadically the Jurisdictional Officers conducted verification and drew samples; ○ post 01.08.2018, there is absolutely no dispute; and ○ during the period in question, neither the product under manufacture/ export i.e. Paper and Paper Products had ever been changed, nor any other benefit, which has been claimed. ➢ In denovo proceedings, after taking the note of the written submissions and the oral arguments, simply traversed beyond the scope of proceedings which were for conversion of free shipping bills to drawback shipping bill in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the course of the argument 4.2 For rejecting the request for amendment of Shipping Bills as per Section 149 of the Customs Act, 1962 impugned order observe as follows:- "Discussion and Finding: ....... I observe that the main issue to be decided in this case is, whether the party's request dated 21/09/2020 regarding conversions of Free Shipping Bills to Drawback Shipping Bills is acceptable or not and whether the benefit of All Industry Rate of duty Drawback may be allowed to the party or not? 1. I observe that the matter pertains to drawback on imported materials used in the manufacture of goods which are exported. The same has to be dealt with section 75 of the Customs Act, 1962 which reads as under: Section 75. Drawback on imported materials used in the manufacture of goods which are exported. (1) Where it appears to the Central Government that in respect of goods of any class or description S[manufactured, processed or on which any operation has been carried out in India, being goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for exportation has been made under....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (a) state on the shipping bill or bill of export, the description, quantity and such other particulars as are necessary for deciding whether the goods are entitled to drawback, and if so, at what rate or rates and make a declaration on the relevant shipping bill or bill of export that- (i). claim for drawback under these rules is being made (ii) in respect of duties of Customs and Central Excise paid on containers, packing materials and materials used in the manufacture of the export goods on which drawback is claimed, no separate claim for rebate of duty under the Central Excise Rules, 2002 or any other law has been or will be made to the Central excise authorities: Provided that if the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, is satisfied that the exporter or his authorised agent has, for reasons beyond his control, failed to comply with the provisions of this clause, he may, after considering the representation, if any, made by such exporter or his authorised agent, and for reasons to be recorded, exempt such exporter or his authorised agent from the provisions of this clause. As per this rule t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ught the guidance of department but no such letter was written by the party to the department. Accordingly it is amply clear that the party failed to provide any plausible grounds which could establish that due to reasons beyond control they failed to comply with the provisions of Rule 13(1)(a) of the Central Excise and Service Tax Drawback Rules, 2017. 3. I further observe that implementation of GST was paradigm shift from old tax regime to new era of taxation under GST and accordingly various issues have been highlighted by the field formations as well as exporters regarding export of claim under drawback in GST Scenario. However, taking immediate corrective measures, the board (CBIC) has issued many circulars to resolve the issues and clarify the ambiguity noticed in new era of GST. Some circulars e.g. Circular No. 32/2017- Customs dated 27.07.2017 and Circular No. 38/2017 dated 22.09.2017 were issued by the Board clarifying drawback related changes. For instance Para (a) and Para (d) of above said Circular No. 38/2017 dated 22.09.201 7 reads as under: a . Definition of Drawback has been amended to provide for drawback of Customs and Central Excise duties excluding inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o amendment of a bill of entry or shipping bill or bill of export shall be so authorised to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be." ........ ........ From the above it is clear that option to amend any document under section 149 is restricted. Exporter doesn't have unfettered right to get the documents amended under this section. As per the Section 149 amendment can be made "Within such time, subject to such restrictions and conditions, as may be prescribed". These time limits and other restrictions and conditions are prescribed vide Circular No. 36/2010 dated 23.09.2010. Relevant portion i.e. Para (3) of this circular reads as under: 3. The issue has been re-examined 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, from Advance Authorizati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvice Tax Drawback Rules, 2017. 8. I further observe that in exercise of powers conferred by Section 157 (General Power to make regulations) read with Section 149 of the Customs Act, 1962 the board (CBIC) made Shipping Bill (Post Export conversion in relation to instrument based scheme) Regulations, 2022 vide notification No. 11/2022-Customs(N.T.) dated 22.02.2022. Regulation No. 03 of this Regulation elaborates manner and time limit for applying for post export conversion of Shipping Bill in certain cases which reads as under: 3. Manner and time limit for applying for post export conversion of Shipping Bill in certain cases. - (1) The application for conversion shall be filed in writing within a period of one year from the date of order for clearance of goods under sub-section (1) of section 51 or section 69 of the Act, as the case may be: Provided that the jurisdictional Commissioner of Customs, having regard to the circumstance under which the exporter was prevented from applying within the said period of one year, may consider and decide, for reasons to be recorded in writing, to extend the aforesaid period of one year by a further period of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of free shipping bills into EP scheme shipping bills (advance authorization, DFIA, DEPB, reward schemes etc.) should not be allowed. However, the Commissioner may allow All Industry Rate of duty drawback on goods exported under free shipping bill, without conversion of such free shipping bill to Drawback Scheme shipping bill, in terms of the proviso to rule 12(1) (a) of the Customs, Central Excise and Service Tax Drawback Rules, 1995." In this circular the board (CBIC) has clarified that in terms of proviso to rule 12(1)(a) of Customs, Central Excise and Service Tax Drawback Rules, 1995 (now Rule 13(1)(a) of Central Excise and Service Tax Drawback Rules, 2017) All Industry Rate of duty drawback may be allowed without conversion of shipping bill. Thus, it is crystal clear that permission to allow All Industry Rate of duty drawback without conversion shall only be granted in accordance of proviso to Rule 13(1)(a) of the Customs, Central Excise and Service Tax Rules, 2017; meaning thereby the exporter must establish the fact that due to the reason beyond their control they failed to comply with the conditions as prescribed in Rule 13(1)(a). However, as discussed in foregoin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has been re-examined 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, from Advance Authorization/DFIA scheme to Drawback/DEPB scheme) or within the schemes involving same level of examination (for example from Drawback scheme to DEPB scheme or vice versa) irrespective of whether the benefit of an export promotion scheme claimed by the exporter was denied to him by DGFT/DOC or Customs due to any dispute or not. The conversion may be permitted in accordance with the provisions of section 149 of the Customs Act, 1962 on a case to case basis on merits provided the Commissioner of Customs is satisfied, on the basis of documentary evidence which was in existence at the time the goods were exported, that the goods were eligible for the export promotion scheme to which conversion has been requested. Conversion of shipping bills shall also be subject to conditions as may be specified by the DGFT/MOC. The conversion may be allowed subject to the following further conditions: a) The request for conversion is made by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... During 2014-15, they faced difficulties in competing in the international market due to escalation in cost of production and competition. In order to reduce the cost of production, so as to complete in the international market, they hired auditors to conduct audit for the said purpose. From such audit only they came to know that they have been exporting taxes also in addition to exporting the goods which otherwise, could have been got back as duty drawback. As per drawback sub-serial No. 8409, subject goods are eligible for 2% drawback." 14. On realizing the mistake/omission, the appellants vide their letters dated 9-10-2015 and 25-1-2016, requested the Commissioner to convert the Free Shipping Bills to Drawback Shipping Bill so as to sanction the drawback for the same. In the Annexure to the letter dated 9-10-2015, they have requested for conversion of Shipping Bills from the period January, 2012 to December, 2014. The details in the Annexure are as under :- Annexure Period INR FOB Value of Export INR DBK Amount 1. January, 2012 to March, 2012 3,75,95,276.88 7,51,906.00 2. April, 2012 to June, 2012 4,68,16,310.85 9,36,320.00 3. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2014 8,52,79,400.78 14,51,424.00 22. July, 2014 to September, 2014 9,39,08,202.03 15,96,443.00 23. October, 2014 to December, 2014 5,29,61,530.50 9,40,536.00 4,302,050,859.59 81,120,455.25 16. It is stated in these letters that they have produced the necessary documents in the nature of Shipping Bill, ARE-I, BRC etc. In the impugned order one of the reasons for rejecting the request is that the documents at the time of exports are not available. However, there is no such allegation raised in the Show Cause Notice which was issued on the basis of these letters. In the Show Cause Notice, the only ground raised is that the request for conversion is time barred. 17. The only requirement under Sec. 149 to allow amendment is that the exporter has to produce documentary evidence which was in existence at the time of export. The department does not specifically dispute the export of goods. The appellants have furnished copies of Shipping Bills, BRC and ARE-1. These documents are sufficient to prove that goods manufactured by them using imported inputs were exported. The ARE-1 document would show that the goods have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... authorised to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be". 21. It can be seen that law allows amendment of the shipping bill even after the goods have been exported. The only requirement, as already discussed, is that the exporter has to produce documentary evidence which was in existence at the time when goods were exported. 22. The question as to whether the conversion of the shipping bills can be allowed at a later stage after exports has been considered in a plethora of judgments. In the decisions relied by the Learned Counsel for appellant, this issue has been held in favour of the assessee allowing the conversion of shipping bill and reiterating that Section 149 of Customs Act, 1962 does not prescribe any time limit. 23. The jurisdictional High Court in the case of M/s. Hewlett Packard Enterprises v. Joint Commissioner of Customs - 2021 (375) E.L.T. 488 observed that the proviso in Section 149 permits amend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ess of such documents or a confirmation as to whether such documents were actually 'in existence' is certainly to be left open for thorough examination by the customs authorities and the Court would have no say in such a factual matter. Suffice it to say that the Department should take note of the documents that are presented by an assessee as being 'in existence' at the relevant time to evidence an error sought to be amended. 14. In the light of the discussion as aforesaid, the rejection of the request for amendment by the respondent is set aside to be re-done de novo. This writ petition is allowed." 24. The Hon'ble jurisdictional High Court in the case of Global Calcium Pvt. Ltd. v. Commissioner of Customs, Chennai vide judgment dated 29-6-2017 in CMA No. 875 of 2017 observed as under :- 1. After some arguments, Mr. Derrick Sam, seeks to withdraw the captioned appeal. Learned Counsel, however, says that he has only one apprehension, which is, that the Adjudicating Authority may subject the claim for duty drawback to the time limit of three months provided in the Circular No. 36/2010-Cus., dated 23-9-2010 (in short, "2010 Circular"). 2. Acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns including the decisions in Hewlett Packard Enterprises (supra) and Usha International Ltd. v. Assistant Commissioner - 2019 (365) E.L.T. 56 (Mad.). The relevant paras read as under :- "17. The Learned Counsel for the petitioners submits that the mistake in adopting the correct classification for the purpose of assessment can be rectified under Section 149 read with Section 154 of the Customs Act, 1962. Section 149 of the Customs Act, 1962 a proper officer in his discretion may authorise any document to be presented. Section 149 of the Customs Act, 1962 reads as under :- "Amendment to Documents. - Save as otherwise provided in Sections 30 and 41, the proper officer may, in his discretion authorise any document, after it has been presented in the Customs House to be amended : Provided that no amendment of a bill of entry or a shipping bill or bill of export shall be so authorised to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wake up to realize the mistake or omission. In our opinion, the remedy has to be sought for within a reasonable time. A legal claim cannot be enforced if there is a long delay in asserting the right or the claim. 29. The duty drawback or drawback is a fundamental principle of international trade law and policy under which the duties, taxes and fees paid on imported inputs which are used for manufacture of goods and then exported are refunded. This is allowed in the nature of export promotion scheme and the intention is to eliminate the recovery of such costs (duty, taxes and fees) on the export goods in the international market. Chapter X of The Customs Act, 1962 provides for the law relating to drawback. Sections 74 and 75 deals with two types of drawback. Section 74 of the Chapter speaks about drawback allowable on export of duty paid goods. Section 75 deals with drawback of imported materials used in the manufacture of goods which are exported which would be relevant for the case on hand. Sub-section (2) of this section lays down that Central Government may make rules for the purpose of carrying out the scheme of drawbacks. Section 75A speaks about interest. It states t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... claim for refund of duty. The refund claim under this section has to be filed within one year from the date of payment of duty. Section 28 deals with recovery of duty which is not paid or short-paid. While raising a demand for recovery of such duty the period is limited to two years. Prior to 14-5-2016, this period was one year. In case of fraud, collusion or suppression of facts, the said period for which the duty can be demanded and recovered is extended to five years. When the time limit is specifically prescribed, the same would apply and one need not take recourse to the Limitation Act. 35. In the absence of any period of limitation prescribed, it is generally understood that every authority has to exercise the powers within a reasonable period. Conversely, any right that has to be enforced is to be sought without unreasonable delay. If the right is not enforced within reasonable time the remedy would stand extinguished. No hard and fast rule can be laid down to determine what is reasonable time. It depends upon the facts and circumstances of each case. 36. In the case of Collector of Customs v. TVS Whirlpool - 1996 (86) E.L.T. 144 (Tri.) the question that c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... accept this plea of the Ld. D.R. in view of the judgment of the Hon'ble Supreme Court in the case of G.O.I. v. Citedal Fine Pharmaceuticals (supra). The Hon'ble Supreme Court in para 6 has held is reproduced below : "Ld. Counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12, does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e years for recovery of money as per Limitation Act, 1963 should apply. The said decision of the Tribunal was upheld by the Hon'ble Supreme Court as reported in 2000 (119) E.L.T. A177 (S.C.). The principle enunciated in these judgments is that when no limitation period is prescribed under the Act, the proceedings for recovery have to be initiated within a reasonable time. 38. Again, Section 128 of the Customs Act, 1962 provides for filing of appeals before Commissioner (Appeals). This section bars the Commissioner (Appeals) from condoning the delay beyond the period of 30 days. The question as to whether delay beyond six months can be condoned by resorting to Section 5 of the Limitation Act, 1963 was discussed by the Hon'ble High Court of Delhi in Delta Impex v. Commissioner of Customs - 2004 (173) E.L.T. 449 (Del.). The relevant portion is as under :- "12. The Customs Act, 1962 itself is a complete Code. Reading various chapters and various sections thereof, it is very clear that it is an Act independent of other provisions. It provides for search, seizure, arrest, confiscation of goods, conveyance, imposition of penalties, settlement of cases, appeals including ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 5 of the Limitation Act is specifically excluded. 40. Reverting to the case on hand, although no limitation has been prescribed in Section 149, an assessee cannot be permitted to take undue advantage. The remedy of amendment under Section 149 should be sought within a reasonable time. We have already expressed our view that there is inordinate delay in filing the application for amendment under Section 149 of the Customs Act, 1962. We then have to consider what would be the reasonable period for entertaining an application under Section 149 of the Customs. 41. The Customs Act, 1962 being a special law and a complete code in itself it would not be proper to pull in the limitation period under the Limitation Act, 1963 and make it applicable to Section 149. More so, because Section 149 does not deal with any recovery of duty or refund of duty. It is a section merely to permit amendment in documents. Amendment is purely a procedural requirement. The legislature in its wisdom has not prescribed either in the Act or Rules a time limit to fulfil this procedural requirement. The consequence of such amendment as already stated, is to claim refund of duty suffered on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd Circular No. 36/2010-Customs, dated 23.09.2010 alongwith the Public Notice Nos. 88/2009, dated 20.11.2009 and 105/2010, dated 20.10.2010 on the subject 'Procedure for post shipment amendment/conversion of free shipping bills to export promotion shipping bills and amendment/conversion of shipping bills from one scheme to another scheme'. 2. In continuation to the Public Notice Nos. 88/2009, dated 20.11.2009 and 105/2010, dated 20.10.2010, it has been decided that all requests for amendments in the shipping bills are divided into two categories:- A. Amendment/conversion in the shipping bill before allowing Let Export Order (LEO). B. Amendment/conversion in the shipping bill after allowing Let Export Order (LEO), i.e., Post Shipment Amendment. ..... Post Shipment Amendments 2.B. Any request for post shipment amendments in the shipping bills shall be processed at Centralized Export Assessment Cell (CEAC) in the following manner:- i. The Customs Broker/ exporter is required to submit his request/application for post-shipment amendment along with all supporting (self-certified) documents to the TA / STA posted in the CEAC,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcular 47/2017- Customs dated 27.11.2017 - reg. Attention of the Exporters, Custom Brokers and all concerned is invited to the Board Circular No. 47/2017-Customs dated 27.11.2017, 34/95-Cus dated 6.4.1995, 57/97- Customs dated 31.10.1997 and 25/2005-Customs and PUBLIC NOTICE No. 22/ 2009 issued vide File No.S/ 22-Gen -116 / 2008 AM Date:21.04.2009 prescribing monetary limits with respect to drawing of samples for the purpose of grant of drawback and giving exemptions from sampling requirements in certain situations. 2. In this regard, in order to further facilitate trade and enhance the ease of doing business, Board has decided to rescind the Circular Nos. 34/95-Cus dated 6.4.1995, 57/97- Customs dated 31.10.1997 and 25/2005-Customs. The export shipments shall continue to be subjected to appropriate treatment in terms of risk criteria provided in Risk Management System (RMS). Wherever export consignments are selected for assessment or examination, the officer of Customs not below the rank of Assistant or Deputy Commissioner of Customs would determine the need to draw sample on merits of each case. Since drawback payment is subject to finalisation of case after rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s :- "6. As per proviso of this Section 149, no amendment of a shipping bill was to be allowed after the export goods have been exported except on the basis of the documentary evidence, which was in existence at the time the goods were exported. The submission of the learned counsel for the appellant/exporter in this regard was that the exporter was in possession of all the documents at the time of export to show that it was entitled to claim under the DEPB/DEEC cum-drawback scheme. From the plain reading of Section 149, it may be seen that exporter could not claim amendment in routine and as a matter of right. The discretion vested in the Proper Officer to permit amendment in any document after the same has been presented in the Customs house. Though this discretion was to be exercised judiciously, but it was qualified with the proviso that the amendment could be allowed only if it was based on the documentary evidence in existence at the time the goods were exported. The Commissioner in the remand case has rightly observed that the present case in fact relates to the request for conversion of shipping bills from one export promotion scheme into another and was not merely....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 peculiar circumstances of the case, the omission to file the declaration of the kind we are concerned with, when all other relative materials are present was not vital to the appellant's case. The material which did and does exist is substantial; the appellant should, therefore, be permitted to amend its shipping bill. The respondents are directed to give effect to this order within the next two months. The appeal is consequently allowed." 4.11 Taking note of the decision in case of Autotech referred earlier and decisions of Hon'ble Kearala High Court and Hon'ble Madras High Court, in the case of Visoka Engineering (P.) Ltd [2022) 1 Centax 205 (Tri.-Mad)] Chennai bench has held as follows: "17. The Hon ble High Court of Kerala in the case of Parayil Food Products (P.) Ltd. v. Union of India 2021 (375) E.L.T. 486 - Kerala High Court, considered a similar issue and held as under:- 8. For the purpose of issuance of No Objection, provisions of ....