Gujarat High Court
Oriental Carbon And Chemicals Limited vs Union Of India on 24 March, 2021
Equivalent citations: AIRONLINE 2021 GUJ 304
Author: J.B.Pardiwala
Bench: J.B.Pardiwala, Ilesh J. Vora
C/SCA/15615/2019 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 15615 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA Sd/-
and
HONOURABLE MR. JUSTICE ILESH J. VORA Sd/-
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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ORIENTAL CARBON AND CHEMICALS LIMITED
Versus
UNION OF INDIA
================================================================
Appearance:
MS AMRITA M THAKORE(3208) for the writ-applicant(s) No. 1
MR DEVANG VYAS(2794) for the Respondent(s) No. 1,2,3
MR NIKUNT K RAVAL(5558) for the Respondent(s) No. 1,2,3,5
MR PARTH H BHATT(6381) for the Respondent(s) No. 4
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CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MR. JUSTICE ILESH J. VORA
Date : 24/03/2021
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. By this writ-application, under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs :
Page 1 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021C/SCA/15615/2019 JUDGMENT "(A) Your Lordships be pleased to issue a writ of or in the nature of mandamus or any other writ, order or direction directing the respondents to :
(i) Forthwith revoke the suspension of the Duty Credit Scrips bearing nos.3719000681/0/36/00, 3719000683/0/ 36/00 and 3719000682/0/36/00 issued to the petitioner under the provisions of the Merchandise Exports from India Scheme in the Foreign Trade Policy, 2015-20, and return the said Duty Credit Scrips to the petitioner after extending the validity thereof for a period of 18 months from the date of such return of the said Duty Credit Scrips.
(ii) To issue to the petitioner Duty Credit Scrips under the provisions of the Merchandise Exports from India Scheme in the Foreign Trade Policy, 2015-20 against the petitioner's applications bearing File Nos.37/21/090/00174/AM16, 37/21/090/80077/AM17 and 37/21/090/80078/AM17.
(B) Your Lordships be pleased to issue a writ of or in the nature of mandamus or any other writ, order or direction directing the respondents to allow the petitioner to amend the shipping bills mentioned in Annexure-G herein above, by permitting the following declaration to be inserted on the shipping bills : "We intend to claim rewards under Merchandise Exports from India Scheme (MEIS)" and/or by issuing appropriate amendment certificates to this effect.
(C) Such other and further reliefs as deemed just and proper in the facts and circumstances of the present case be granted."Page 2 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021
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2. The facts giving rise to the present litigation are as under :
(a) The writ-applicant is engaged, inter alia, in the business of exporting Insoluble Sulphur from its unit located at the Adani Port and SEZ, Mundra, Kutch. The writ-applicant is eligible to get the benefits under the MEIS scheme in view of its exports being that of a notified product to the notified countries. The writ-applicant has been exporting Insoluble Sulphur since 1995, and prior to the MEIS scheme, the writ-applicant was availing the export benefits under the Focus Market Scheme of the erstwhile FTP in respect of the Insoluble Sulphur exports.
Moreover, even under the MEIS scheme, the writ-applicant has received export benefits in respect of the exports made by it post June 2015. The issue which arises in the present writ- application pertains only to the period between 1.4.2015 and 31.3.2015.
(b) During the period between 1.4.2015 and 31.5.2015, the writ-applicant had exported certain quantities of Insoluble Sulphur from the Mundra Port (a non-EDI port) through various shipping bills. Since the exports were of a notified product and to the notified countries, the writ-applicant was entitled to the benefits under the MEIS scheme. The writ-applicant's shipping bills bear the endorsement of the authorities of having examined the goods and supervised the stuffing. However, the aforesaid shipping bills did not contain the declaration as per the Clause 3.14 of the Handbook of Procedures. This was only a procedural or a technical lapse. Moreover, if at all such declaration was required, it was a curable defect.
Page 3 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021C/SCA/15615/2019 JUDGMENT (c) The writ-applicant filed appropriate applications bearing File Nos.37/21/090/00005/AM16, 37/21/090/00065/AM16, 37/21/090/00172/AM16, 37/21/090/00174/AM16, 37/21/
090/80077/AM17 & 37/21/090/80078/AM17 respectively to the concerned authorities seeking benefits under the MEIS in respect of the aforesaid exports made by the writ-applicant, and also complied with all the documentary requirements for grant of the rewards.
(d) Against the applications bearing File Nos.37/21/090/00005/AM16, 37/21/090/00065/AM16 and
37/21/090/00172/AM16 respectively, initially the authorities had raised certain issues including the issue of non-mentioning of the declaration of intent on the shipping bills, and had sought clarification from the DGFT as to whether the declaration was mandatory for the period between 1.4.2015 and 31.3.2015. On 7.3.2016, the writ-applicant also addressed a letter to the office of the DGFT, seeking clarification in this regard. However, against these three applications (i.e. applications bearing File Nos.37/21/090/00005/AM16, 37/21/090/00065/AM16 and 37/21/090/00172/AM16), three scrips/licenses (bearing nos. 3719000681/0/36/00, 3719000682/0/36/00 & 3719000683/ 0/36/00 respectively) aggregating Rs.20,01,236/- were thereafter issued by the concerned authorities in June 2016, which confirmed the writ-applicant's understanding of non- requirement/relaxation of declaration of intent for the period in question. However, on that day, the said three scrips were put under suspension on the ground that a clarification was awaited from the DGFT, New Delhi, in regard to whether the non-EDI Page 4 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT shipping bills prior to 1.6.2015 without the declaration of intent were eligible for the MEIS benefits. The writ-applicant was asked to surrender the scrips. Accordingly, the writ-applicant was left with no other choice but to surrender the said three scrips on 28.7.2016. On the basis of the same, since there was no declaration on the shipping bills, no scrips were issued to the writ-applicant against the rest of its applications bearing the File Nos. 37/21/090/00174/AM16, 37/21/090/80077/AM17 and 37/21/090/80078/AM17 respectively. Therefore, the deficiency letters were issued in this regard.
(e) The writ-applicant is aware that its claim in respect to the balance applications was not being processed since the necessary clarification as to whether such non-EDI shipping bills prior to 1.6.2015 were eligible for the benefits under the MEIS scheme or not, was not issued by the DGFT. One such letter dated 3.8.2016 was issued by the Office of the Development Commissioner with regard to the application bearing File No.37/21/090/80077/AM17, categorically stating that the claim was kept pending till the DGFT clarified the matter.
(f) On or around 13.7.2016, during an interactive session with the DGFT arranged by the Federation of Indian Chambers of Commerce and Industry (FICCI), the writ-applicant made a representation to the DGFT in this regard and also provided all the relevant documents. Thereafter, the writ-applicant also addressed an email dated 22.7.2016 to the FICCI providing the relevant documents, explaining its case in detail and requesting that the matter be taken up with the DGFT. Thereafter, on 19.9.2016, the writ-applicant also filed its grievance on the on-
Page 5 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021C/SCA/15615/2019 JUDGMENT line portal of the DGFT. However, the writ-applicant got no response from the DGFT to his requests and grievances.
(g) On 30.9.2016, another interactive session between the exporters, Customs Department and DGFT was organized by the Federation of Indian Export Organizations (FIEO), wherein also the writ-applicant's matter was put up before the authorities. On 10.10.2016, the FIEO addressed an email to the Joint DGFT requesting for resolving the matter of the writ-applicant. The writ-applicant, thereafter, time and again made personal inquiries with the DGFT and was informed that the issue was pending consideration.
(h) Since the writ-applicant's corporate office was going to shift to a new location on 12.12.2016, the writ-applicant addressed a letter to the office of the Development Commissioner, Kandla SEZ, intimating this fact and requesting that all future correspondence be addressed to the new address.
(i) The writ-applicant once again addressed a letter to the Joint Development Commissioner, Kandla SEZ, explaining the entire case and requesting for revocation of the suspension of the scrips. However, the writ-applicant received no response from the office of the Development Commissioner, Kandla SEZ. Upon making personal inquiry, the writ-applicant was informed that the matter was under active consideration by the DGFT and that no action could be taken till such clarification was issued by the DGFT. Time and again, the writ-applicant followed up and made personal representations to all authorities.
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(j) The writ-applicant also addressed a letter to the Additional DGFT, New Delhi, requesting for revocation of the suspension of the scrips. However, there was no response from the office of the DGFT and it was understood that the issue was under active consideration by the DGFT in light of its public notices issued in respect of the exports made from the EDI ports.
(k) All of a sudden, in August 2018, the office of the Development Commissioner, Kandla SEZ, addressed three letters in respect of the three pending applications bearing File Nos.37/21/090/00174/AM16, 37/21/090/80077/AM17 and 37/21/090/80078/AM17, stating that the writ-applicant was required to remove the deficiency in regard to the MEIS declaration not having been mentioned on all the shipping bills within 30 days otherwise the case would be treated as closed. Since the writ-applicant's office had shifted to another location, the said three letters, which were addressed to the old office, came to be delivered to the writ-applicant in October 2018. Immediately thereupon, the writ-applicant addressed three letters in respect of the aforesaid three applications, categorically stating that it intended to claim the rewards under the MEIS and was hereby removing the defect in the shipping bills and requesting that its letter be treated as a formal declaration of the intent. However, nothing further was heard from any of the authorities despite repeated follow up and inquiries by the writ- applicant at the local level as well as the New Delhi and the writ- applicant was merely told that the matter was under
consideration.Page 7 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021
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(l) In such circumstances, without prejudice to its rights and contentions, the writ-applicant also filed an application seeking permission/authorisation to amend the shipping bills (Annexure-G) under Section 149 of the Customs Act, 1962, by permitting the following declaration to be inserted on the shipping bills:
"We intend to claim rewards under Merchandise Exports from India Scheme (MEIS)."
(m) The writ-applicant also enclosed the self-certified copies of all the documentary evidence which was in existence at the time when the goods were exported along with the said application. The writ-applicant also made personal representations in this regard, explained the case in detail as to why the amendment was being sought and submitted that it was in the interest of justice to allow such amendment which would not prejudice anyone. The writ-applicant also addressed a reminder dated 20.7.2019 in this regard submitted on 29.7.2019. However, no decision is taken even on this application.
3. In such circumstances referred to above, the writ-applicant is here before this Court with the present writ-application.
RELEVANT PROVISIONS OF THE FOREIGN TRADE POLICY AND PROCEDURES :
4. The Foreign Trade Policy issued from time to time, inter alia, contains various schemes or promotional measures for encouraging the exports.
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(a) Chapter 3 of the Foreign Trade Policy, 2015-20 (for short, the 'FTP') contains some of these schemes and promotional measures. One such scheme is the Merchandise Exports from India Scheme (for short, 'the MEIS'). The MEIS replaces five other similar incentive schemes which were part of the earlier Foreign Trade Policy, 2009-14. The incentive under the MEIS is in the form of freely transferable Duty Credit Scrips granted as a reward to the exporter to compensate for his loss on payment of duties. The Duty Credit Scrips can be used for payment of customs duty or excise duty or service tax as stated in the Scheme. The incentive is paid as a percentage of the realized FOB value (in free foreign exchange) for notified goods going to notified markets as listed in Appendix-3B to the Handbook of Procedures. To determine the quantity of incentive, the countries have been segregated into three groups. Incentives on exports of each product at 8-digit level (ITC HS Codes) depend on the group in which its destination country belong. The objective of the MEIS is to enhance India's export competitiveness and it promotes exports of products listed in Appendix-3B to the Handbook of Procedures.
(b) Chapter 3 of the Handbook of Procedures provides for the procedure for claiming incentives under the MEIS. As per the same, an application for claiming rewards is required to be filed on-line on the website of the Directorate General of Foreign Trade (for short, 'the DGFT') in the prescribed form ANF-3A and the relevant shipping bills and electronic Bank Realization Certificate (eBRC) are required to be linked to such application.
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(c) Chapter 3 of the Handbook of Procedures, when issued on 1.4.2015, contained the following paragraph :
3.14(a) Export shipments filed under all categories if Shipping Bills 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. In the case of shipping bills (other than free shipping bills), such declaration of intent shall be mandatory with effect from 1st June 2015.
5. The aforesaid is merely a procedural provision requiring the aforesaid declaration to be made in the shipping bills. This requirement of declaration on the shipping bill appears to have been introduced only for the purpose of internal convenience of the authorities, i.e. for the purpose of internal communication/ transmission of shipping bills containing such declaration from the customs authorities to the DGFT.
6. It is evident from the scheme of the MEIS, as contained in the Chapter 3 of the FTP, that the eligibility for getting the MEIS Page 10 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT benefits is determined by the products exported (they should be listed in Appendix-3B to the Handbook of Procedures) and the destination country.
7. The Central Board of Excise and Customs (CBEC) issued Circular No.14/2015-Cus dated 20.4.2015, inter alia, stating that the declaration of intent for reward on goods requires the exporter to, for shipping bills filed from 1.6.2015 onwards, mandatorily, declare the intent for rewards on the shipping bills and till then, the present position of mandatory declaration for certain shipping bills would continue. It was also stated that the changed position would enable the Customs to take more informed decisions. Thus, it was the understanding of the authorities that such declaration of intent was mandatory with effect from 1.6.2015. Despite this, it appears that, even during the period between 1.4.2015 and 31.5.2015, it was expected that such declaration be made by the exporter intending to claim the benefits under the MEIS. In EDI generated shipping bills (i.e. Electronic Data Interchange, which allows electronic processing of export documents), the exporter were required to tick "Y" in the reward box in case the exporter intended to claim the benefits under the MEIS and "N" in case they did not intend to claim such benefits. In the non-EDI shipping bills, the declaration was manual one on the shipping bills, stating the words: "We intend to claim rewards under Merchandise Exports from India Scheme (MEIS)".
8. A public notice bearing No.40/2015-20 dated 9.10.2015 was issued by the DGFT, inter alia, stating that, in exercise of Page 11 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT the powers conferred under paragraph 1.03 of the FTP read with paragraph 3.14 of the Handbook of Procedures, the DGFT exporters who had inadvertently marked "N" instead of "Y" but intended to claim the MEIS benefits, to submit physical copies of the free shipping bills at the time of submission of the application for the MEIS rewards and directing the regional authorities to grant the MEIS rewards after examination of such shipping bills. It was even stated in the public notice that the aforesaid declaration of intent on the shipping bills was mandatory with effect from 1.6.2015. Thus, the DGFT provided relief to the exporters who had exported goods through the EDI ports. However, similar relief was arbitrarily not provided to the exporters who had exported the goods through the non-EDI ports. Subsequently, a further public notice bearing No.47/2015-20 dated 8.12.2015 was also issued by the DGFT, extending such relief to the exporters who had exported through the EDI-ports during the period between 1.6.2015 and 30.9.2015, but had inadvertently ticked "N" in the rewards item box. However, similar relief was arbitrarily not provided to the exporters who had exported the goods through the non-EDI ports. Thereafter, another public notice bearing No.09/2015-20 dated 16.5.2016 came to be issued, inter alia, stating that in the case of the EDI shipping bills, it was sufficient to merely tick "Y" in the rewards column of the shipping bills against each item in order to declare the intent to claim the benefits under the MEIS, whereas in respect of the non-EDI shipping bills, such declaration would have to be stated on the shipping bills. Thus, the authorities have, time and again, provided much relaxation/concessions with regard to the declaration under paragraph 3.14 of the Handbook of Procedures to the exporters Page 12 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT who have exported the goods from the EDI ports. However, for no justifiable reasons, the relaxation/concessions are not provided to the exporters who have exported the goods from the non-EDI ports.
SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT :
9. Ms.Amrita Thakore, the learned counsel appearing for the writ-applicant, vehemently submitted that the action of the respondents in denying the benefits of the MEIS to the writ-
applicant on the ground of absence of the declaration as per Clause 3.14 of the Handbook of Procedures is ex-facie arbitrary, unreasonable, unconstitutional, perverse and illegal since there is no dispute that the writ-applicant is eligible to claim the benefits under the MEIS as it has indisputably exported the notified goods to the notified countries as per the scheme of the MEIS. She would submit that even the authorities had understood that the requirement of the declaration of intent to claim the MEIS benefits on the shipping bills is effective from 1.6.2015. The authorities had, therefore, issued three scrips to the writ-applicant. It is submitted that there was some confusion whether such declaration was required for the period between 1.4.2015 and 31.5.2015. The same prompted the authorities at Kandla to seek the necessary clarification from the DGFT. Hence, the writ-applicant could not have been denied the MEIS benefits on this ground.
10. Ms.Thakore would further submit that in any case, the requirement of the declaration of intent to claim the MEIS Page 13 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT benefits is at best a procedural or a technical requirement as contained in the Handbook of Procedures which merely lays down the procedure to be followed for the purpose of implementing the FTP. The said provision of the declaration of intent is only for the purpose of internal convenience of the authorities, i.e. for the purpose of internal communication/ transmission of shipping bills containing such declaration from the Customs authorities to the DGFT. It is a procedural requirement and, therefore, not mandatory. The failure thereof should not entail harsh consequences upon an exporter. It is at best a directory requirement and non-mention thereof is an inadvertent procedural lapse/defect which can be waived or cured.
11. She would further that the authorities have ample powers to grant relaxation/waiver and have, in fact, granted appropriate relaxation/waiver in case of the EDI ports. Therefore, even the authorities have not treated this procedural requirement as mandatory or its non-compliance as fatal. It is extremely unreasonable, arbitrary, irrational, discriminatory and highhanded to not grant relaxation/waiver in case of exports made from non-EDI ports.
12. She would submit that pursuant to the letters addressed by the authorities in August 2018 asking the writ-applicant to remove the defect, the writ-applicant had addressed letters dated 31.10.2018 categorically declaring its intention to claim rewards under the MEIS and removing the defect in the shipping bills and requesting that its letter be treated as formal declaration of the intent. The writ-applicant also sought amendment of its Page 14 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT shipping bills under Section 149 of the Customs Act, 1962 so as to mention the declaration of intent as required by Clause 3.14 of the Handbook of Procedures, which would cure the defect.
13. Ms.Thakore would submit that the writ-applicant's amendment application seeking to amend the shipping bills by inserting the requisite declaration can cure the defect and ought to have been considered and allowed. The Circular No.36/2010 dated 23.9.2010, which is sought to be relied upon by the respondents, seeks to impose a limitation period of 3 months, which is not found in the parent provision, i.e. Section 149 of the Customs Act, 1962. It is submitted that a subordinate legislation cannot travel beyond the parent statute or impose a limitation or restriction not found in the parent statute. It is pointed out that this Court, in the case of Principal Commissioner of Customs vs. M/s. Lykis Limited, 2021 (2) TMI 261, upheld the Tribunal's judgment holding that, when no time limit is prescribed in Section 149 of the Customs Act, 1962, no such time limit can be fixed by way of a circular. Thereafter, in the case of M/s. Mahalaxmi Rubtech vs. UOI, this Court passed a judgment dated 2.3.2021, holding that the said Circular is ultra vires Articles 14, 19(1)(g) of the Constitution and Section 159 of the Customs Act, 1962. Moreover, in the present case, the authorities themselves had sought clarification from the DGFT, as to whether such declaration was mandatory and no authority issued any communication to the writ-applicant to seek amendment of the shipping bills under Section 149 of the Customs Act, 1962. It is submitted that, therefore, it is not correct to blame the writ-applicant for not having sought the amendment within 3 months.
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14. Ms.Thakore would submit that the respondents' contention that free shipping bills are subject to nil examination norms or different examination norms is incorrect and untenable since : (i) the Customs Act, 1962, contains several safeguards as provided by Sections 39 to 42, 50 and 51 thereof, under which, the authorities are duty bound to duly pass all the shipping bills before any goods can be exported and are required to ascertain, whether the goods are prohibited for export before permitting the clearance of any goods for export; (ii) the authorities are required to issue entry outwards to the vessels carrying export goods before the vessels can be loaded and are required to issue a written order permitting the vessel to leave the port after all the procedures are duly completed, (iii) the goods covered by writ- applicant's shipping bills were, in fact, examined as borne out from the endorsements made on the shipping bills; and (iv) the respondent's reliance upon rule 46(1)(c) of the SEZ Rules as amended vide Notification dated 19.9.2018 is completely misplaced since the exports in question were during the period between 1.4.2015 and 31.5.2015, at which point of time, there was no provision in the said rule 46 for examination of goods where the MEIS benefits are claimed; (v) the respondents themselves asked the writ-applicant to remove the defect (i.e. lack of declaration) vide their letters issued in August 2018 and, therefore, the respondents were ready to allow the writ- applicant's claim despite the said declaration not having been there on the shipping bills at the relevant time.
15. Ms.Thakore would further submit that in identical cases, viz. (i) Bombardier Transportation India Pvt. Ltd. vs. Directorate Page 16 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT General of Foreign Trade, 2021 (3) TMI 9, (ii) Judgment dated 8.2.2021 in the case of M/s. Raj & Co. vs. UOI, and (iii) M/s. Gokul Overseas vs. UOI, (SCA No.7500 of 2019 decided on 21.1.2020), this Court has allowed the writ-application and directed the authorities to allow the MEIS benefits/permit the writ-applicant to convert the shipping bills in question from the free shipping bills to the MEIS shipping bills. These decisions squarely covers the present matter. That apart, even the Delhi High Court, in the case of Kedia Agencies vs. Commissioner of Customs, reported in 2017 (348) ELT 634 (Del), has held that the omission to file the declaration for claiming the export incentive was not vital and the exporter should be permitted to amend its shipping bill. The Madras High Court has also allowed amendment of the shipping bills in similar facts and circumstances in several cases such as Pasha International vs. Commissioner of Customs, 2019 (365) ELT 669 (Mad), Global Calcium vs. Asst Commissioner of Customs, 2019 (370) ELT 176 (Mad) and P. A. Footwear vs. DGFT, 2020 (372) ELT 660 (Mad).
SUBMISSIONS ON BEHALF OF THE RESPONDENTS :
16. Mr.Parth Bhatt, the learned standing counsel appearing for the respondent no.4 and Mr.Nikunt Raval, the learned standing counsel appearing for the respondents nos.1, 2 and 3, would submit that there is no verification of the goods at the time of the export in the case of free shipping bills and, in such circumstances, the writ-applicant should not be permitted to amend its shipping bills later for the purpose of claiming the MEIS benefits. Both the learned counsel would further submit that the request for amendment under Section 149 of the Page 17 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT Customs Act, 1962, is delayed, as the same is hit by the Circular No.36/2010 dated 23.9.2010 which prescribes three months time limit.
17. In the last, it is submitted that vide public notice bearing No.40/2015-20 dated 9.10.2015 and public notice bearing No.47/2015-20 dated 8.12.2015 respectively, the relaxation was granted in the case of the EDI shipping bills not containing declaration only because the electronical filing was being done for the first time and, therefore, the similar relaxation in the case of the non-EDI shipping bills cannot be granted.
ANALYSIS :
18. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether the writ-
applicant is entitled to the reliefs as claimed in his writ- application.
19. With respect to the first objection raised on behalf of the respondents, we may only say that the goods covered by writ- applicant's shipping bills were, in fact, examined as borne out from the endorsements made by the authorities on the shipping bills. The Customs Act, 1962, provides for several safeguards as contained in Sections 39 to 42, 50 and 51 respectively, under which the authorities are duty bound to duly pass all the shipping bills before any goods can be exported; the authorities are required to ascertain whether the goods are prohibited for Page 18 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT export before permitting the clearance of any goods for export; the authorities are required to issue entry outwards to the vessels carrying the export goods before the vessels can be loaded; the authorities are required to issue a written order permitting the vessel to leave the port after all the procedures are duly completed. Therefore, it is not correct to say that no verification is undertaken at the time of the export.
20. The respondents seek to rely upon the newly introduced Rule 46(1)(c) of the SEZ Rules in order to contend that there is a specific provision for examining the goods covered by the MEIS Scheme. However, this contention is completely misplaced since this provision was introduced vide M.C. & I. (D.C.) Notification GSR No.909(E) dated 19.9.2018, whereas the exports in question were much prior thereto (i.e. during the period between 1.4.2015 and 31.5.2015), at that point of time, there was no separate provision in the said Rule 46 for examination of the goods where the MEIS benefits are claimed.
21. Section 149 of the Customs Act, 1962, specifically permits amendment of the shipping bills even after the export on the basis of the documentary evidence which was in existence at the time the goods were exported. There is no restriction in the said provision for not allowing the amendment after the goods are exported unless the goods are checked at the time of export. Hence, the authorities cannot to introduce such restrictions de hors the said provision. The respondents had themselves asked the writ-applicant to remove the deficiency (i.e. lack of declaration) vide their letters issued in August 2018. Therefore, the respondents were ready to allow the writ-applicant's claim Page 19 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT despite the said declaration not having been there on the shipping bills at the relevant point of time. This contention, therefore, has no substance.
22. This Court, as well as other High Courts have allowed several petitions where the free shipping bills were allowed to be amended and/or the MEIS benefits were directed to be given despite lack of declaration. [See (i) Bombardier Transportation India Pvt. Ltd. vs. Directorate General of Foreign Trade, 2021 (3) TMI 9; (ii) Judgment dated 8.2.2021 in the case of M/s. Raj & Co. vs. UOI; (iii) M/s. Gokul Overseas vs. UOI, (SCA No.7500 of 2019 decided on 21.1.2020), wherein this Court had allowed the petition, inter alia, holding that whether the goods confirm to the description, etc. is ascertainable from the shipping bills, invoices, etc. available with the Customs authorities; (iv) Delhi High Court judgment in the case of Kedia Agencies vs. Commissioner of Customs, reported in 2017 (348) ELT 634 (Del);
(v) Madras High Court judgment in the case of Pasha International vs. Commissioner of Customs, reported in 2019 (365) ELT 669 (Mad); (vi) Madras High Court judgment in the case of Global Calcium vs. Asst. Commissioner of Customs, reported in 2019 (370) ELT 176 (Mad); and (vii) Madras High Court judgment in the case of P.A. Footwear vs. DGFT, reported in 2020 (372) ELT 660 (Mad)].
23. The aforenoted decisions squarely cover the present matter.
24. So far as the second objection raised on behalf of the respondents is concerned, we may only say that Section 149 of Page 20 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT the Customs Act, 1962 does not prescribe any time limit. In fact, at the relevant point of time, it did not even provide for the fixation of the time limit by way of rules or regulations. Therefore, no time limit can be read into the said provision nor can it be introduced by way of a circular. It is well-settled that a subordinate legislation cannot travel beyond the parent statute or impose a limitation or restriction not found in the parent statute.
25. This Court, in the case of Principal Commissioner of Customs vs. M/s. Lykis Limited, 2021 (2) TMI 261, has upheld the Tribunal's judgment holding that when no time limit is prescribed in Section 149 of the Customs Act, 1962, no such time limit can be fixed by way of a circular.
26. In the case of M/s. Mahalaxmi Rubtech vs. UOI, (SCA No.21636 of2019, decided on 2.3.2021), this Court upheld that the Circular is ultra vires Articles 14, 19(1)(g) of the Constitution and Section 149 of the Customs Act, 1962. Therefore, the said Circular cannot be relied upon.
27. In the present case, the authorities had themselves sought clarification from the DGFT as to whether such declaration was mandatory prior to 1.6.2015 and were awaiting such clarification. The authorities had even issued three scrips to the writ-applicant against six of its applications, which were later suspended while awaiting such clarification. Hence, it is not correct to blame the writ-applicant for not having sought amendment immediately.
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28. Unlike in other cases, in the present case, no authority issued any communication to the writ-applicant to seek amendment of the shipping bills under Section 149 of the Customs Act, 1962. Even the letters addressed by the respondents in August 2018, asking to remove the deficiency, did not specify that the writ-applicant would have to seek amendment under Section 149 of the Customs Act, 1962. The said letters were addressed at the wrong address of the writ- applicant, despite the writ-applicant having intimated the change of its address to the authorities vide its letter dated 3.8.2016. In such circumstances, the writ-applicant received these letters in October 2018, and immediately thereupon, the writ-applicant addressed letters dated 31.10.2018 categorically declaring its intention to claim the MEIS benefits and removing the defects. When nothing was heard at the end of the authorities, the writ-applicant filed a formal application seeking amendment of the shipping bills. Thus, the writ-applicant cannot be said to have delayed, when the issue, whether or not the declaration was required prior to 1.6.2015 was under
consideration by the authorities and when the authorities themselves have never asked the writ-applicant to amend the shipping bills under Section 149 of the Customs Act, 1962, and have only asked to remove the defect and that too as late as in August 2018.
29. Even in the case of M/s. Gokul Overseas (supra), there was a delay. However, this Court, vide judgment dated 21.1.2020, allowed the petition, inter alia, holding that, whether the goods confirm to the description, etc is ascertainable from the shipping bills, invoices, etc. available with the Customs authorities.Page 22 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021
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30. So far as the last objection raised on behalf of the respondents is concerned, we may observe that in the case of the EDI shipping bills, the declaration is by ticking "Y" (for Yes) in the reward column, which was not done by several exporters who had exported through the EDI ports. This was the exporter's mistake as well as the inadvertent omission of declaration on the shipping bill in the case of the non-EDI shipping bills. Therefore, to discriminate between the two would be unreasonable and unfair.
31. There is no dispute that the writ-applicant is eligible to claim the benefits under the MEIS since it has admittedly exported the notified goods to the notified countries as per the scheme of the MEIS.
32. The writ-applicant has been exporting the very same goods prior to the Foreign Trade Policy, 2015-20, and claiming the benefits under the then extant Focus Market Scheme (FMS) and has subsequently also exported the very same goods and claimed the benefits under the MEIS scheme.
33. The only lapse is with regard to the inadvertent non-
mention of the declaration of intent as per Clause 3.14 of the Handbook of Procedures during the period between 1.4.2015 and 31.3.2015, i.e. during the initial period of the FTP, 2015-20.
34. The writ-applicant's shipping bills were non-EDI only because the Mundra Port was not an EDI port.
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35. This lapse being a technical or a procedural lapse, the writ- applicant should not be denied substantive benefits, as held by this Court in the case of Bombardier Transportation India Pvt. Ltd. (supra).
36. The authorities themselves were not sure whether the declaration was mandatory prior to 1.6.2015 as is evident from the following :
(a) Public Notice No. 40/2015-20 dated 9.10.2015 wherein, in para 3, it is stated that such declaration is mandatory from 1.6.2015.
(b) The authorities had even issued three scrips to the writ-applicant against six of its applications.
(c) The authorities had, in fact, sought clarification from the DGFT as to whether the declaration was mandatory prior to 1.6.2015.
37. The authorities themselves have permitted the writ- applicant to remove the defect vide their letters dated August 2018.
38. The case of M/s. Gokul Overseas (supra) is similar to the case on hand. In that case also the shipping bills were non-EDI and this Court allowed the petition. That apart, even the Delhi Page 24 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021 C/SCA/15615/2019 JUDGMENT High Court, in the case of Kedia Agencies (supra), has held that omission to file declaration for claiming the export incentive under the erstwhile VYGUY scheme was not vital and the exporter should be permitted to amend its shipping bill.
39. In light of the aforesaid, it would be extremely unfair and unjust not to extend the benefits of the MEIS to the writ- applicant on the ground that it had exported goods from a non- EDI port.
40. In the result, this application succeeds and is hereby allowed. The reliefs as prayed for in paragraphs-27A(i), (ii) and 27B respectively are granted. Let the entire exercise be undertaken at the earliest and completed within a period of eight weeks from the date of receipt of order of this Court by the concerned department.
(J. B. PARDIWALA, J.) (ILESH J. VORA, J.) /MOINUDDIN Page 25 of 25 Downloaded on : Fri Mar 26 23:19:48 IST 2021