conversion from one export promotion scheme to another one

PJ/Case Laws/2011-12/1233

Case: Terra Films Pvt. Ltd. versus Commissioner of Customs

Citation:2011 (268) E.L.T. 443 (Del.)

Issue:- Whether conversion from one export promotion scheme to another is allowable in routine?

Brief Facts: The appellant is a manufacturer of c-extruded multilayer film having their factory in specified area of Himachal Pradesh and availing exemption from customs duty. It exported commodities under 7 shipping bills during the period of September 2004 to April 2005. In the shipping bills, they had mentioned about the scheme under which exports were made as "DEPB/DEEC". The goods stood exported to the destination under this scheme. After a lapse of considerable period, the exporter/appellant vide its letter dated 27th January, 2006 requested for permission to amend their DEEC/DEPB shipping bills into those DEEC/DEPB cum drawback scheme.
As per the Board Circular No.4/2004-Cus., Dated 16th January, 2004 of CEBC, the Commissioner of Customs rejected the exporter’srequest for conversion of shipping bill from one export promotion scheme to another.
Being aggrieved by the Commissioner’sorder rejecting their request, the exporter filed an appeal before the CESTAT.
The CESTAT vide its order remanded the matter back to the Commissioner of Customs to examine the claim of the appellant as set out before CESTAT for amendment of the shipping bills under Section 149 of the Act in accordance with law.
While remanding the case, the CESTAT also noted that the said circular does not mention a statutory provision for denying any conversion of shipping bills. CESTAT also noted that in any event the claim of the exporter was for amendment under Section 149 and the same was required to be examined accordingly.
On remand, the Commissioner re-examined the entire issue – both from the point of view of Circular as well as under Section 149 of the Act.
The Commissioner rejected the request of the exporter for amendment of the shipping bills from DEPB/DEEC into those of drawback scheme.
Against order of 6th May, 2008 of the Commissioner, exporter preferred appeal before the CESTAT which came to be dismissed vide the impugned order dated 11th November, 2009.

Appellant’s Contention: The ground given by the exporter for such request was that there had been a mistake in the documentation as they being new exporter were not aware of the procedure. In fact, similar submission was made for the exporter.
The Appellant submitted that they were in possession of all the documents at the time of export to show that it was entitled to claim under DEPB/DECC cum drawback scheme.

Reasoning of the Judgment: It is seen to be admitted case that it was after a considerable period of time, i.e., more than one year after the export of goods, the exporter filed application in January 2006 requesting for amendment of the said shipping bills.
From the Board’s circular dated 16th January, 2004, it may be seen that as per Clause B of the circular that the conversion of free shipping bills into Advance Licence/DEPB/DFRC shipping bills should not be allowed in routine. As regards permitting conversion of shipping bills from one export promotion scheme to another, this clause envisages that such conversion to be allowed only where the benefit of export promotion scheme claimed by the exporter has been denied by DGFT/MOC or Customs due to any dispute. However, in such a case, conversion may be permitted by the Commissioner on case-to-case basis, subject to conditions enumerated in the same circular. Even under Clause A, the request for conversion from one scheme to another was not to be done ordinarily in routine. It was primarily for the reason that such conversion at a later date created difficulties.
There is no dispute with regard to submissions as made by the exporter/appellant that the circular could not override the scope of the Section 149 of the Act and cannot be generalized in every case of amendment of shipping bills.
The revenue emphasize that the request of exporter for conversion of the shipping bills from one scheme to another was that of amendment under Section 149 of the Act and not only confined to conversion within the scope of the aforesaid circular.
In fact, the matter was remanded by the CESTAT to the Commissioner on such submission made by the exporter before the CESTAT.
As per proviso of the 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 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 of an amendment in the shipping bill. The request was made for conversion from one scheme to another after the lapse of long period of more than one year.
The Commissioner in the remand case rightly distinguished the cases cited on behalf of the exporter from the facts of the present. The finding of fact as arrived at by the Commissioner has been rightly upheld by the CESTAT.
The High Court does not see any perversity or illegality in the discretion exercised by the Commissioner in rejecting the request of the exporter of conversion/amendment from one scheme to the other after a lapse of more than one year.

Decision: The appeal is dismissed.

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PJ/Case Laws/2011-12/1233

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