Gujarat High Court
C.C.- Kandla Custom House vs Indian Oil Corporation Ltd. Marketing ... on 23 March, 2022
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 183 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 318 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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C.C.- KANDLA CUSTOM HOUSE
Versus
INDIAN OIL CORPORATION LTD. MARKETING DIVISION WR. INDIAN OIL
BHAVAN
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Appearance:
MR PRIYANK LODHA (6371) for the Appellant(s) No. 1
MR PV SHETH for the Opponent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 23/03/2022
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. Since the issues raised in both the captioned matters are the same and the parties are also the same, those were taken up for Page 1 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022 C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022 hearing analogously and are being disposed of by this common judgment and order.
2. We are of the view that the disposal of the Tax Appeal should govern the disposal of the writ application also and in such circumstances, we have decided to first look into the Tax Appeal itself.
Draft amendment is allowed. The necessary incorporation shall be carried out at the earliest.
3. This Tax Appeal under Section 35G of the Central Excise Act, 1944 (for short "the Act, 1944") is at the instance of the Revenue and is directed against the order dated 10.01.2020 passed by the Customs Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (for short "the CESTAT") in the Custom Appeal No.11125 of 2019 - SM.
4. The Revenue has proposed the following substantial questions of law for the consideration of this Court.
A. "Whether in facts and circumstances of the case and law, the order passed by the Hon'ble Tribunal can be said to be an order passed in accordance with law wherein the Hon'ble Tribunal has allowed the appeal holding that the benefit of section 149 of the Customs Act, 1962, cannot be denied inspite of not complying with the mandatory requirement of specifically mentioning the intention to avail benefit under the MEIS Scheme as per the Foreign Trade Policy?"
B. "Whether in facts and circumstances of the case and law, the Hon'ble Tribunal was right in holding that amendment sought was not in nature of change which may require evidence to prove, considering the fact that what was sought as amendment, was changing the whole nature and character of clearance of the documents and goods Page 2 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022 C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022 from "free shipping bill" to "claiming benefit under a specific scheme?"
C. "Whether in facts and circumstances of the case and law, the Hon'ble Tribunal was right in allowing amendment in shipping bills after a period of about 2-3 years from the export of the concerned goods?"
5. It appears from the materials on record that the respondent - assessee is in the business of export of various goods including Benzene falling under the tariff item 2902 20 00. The consignments are being exported through the Kandla Port.
6. The assessee was availing the benefits under the Merchandise Export from India Scheme (for short "MEIS"), which was introduced as a part of the Foreign Trade Policy and was applicable from 2015 to 2020. Under the said Scheme, certain rewards and incentives were being given to the exporters. Such incentives were given to the exporters at a specified rate which varied from product to product and from country to country.
7. During the period between October, 2015 and November, 2016, the assessee filed 13 shipping bills for the export of Benzene. The details are as under:
Sr. Name of vessel Shipping Bill Date FOB Value (Rs.) No. No. 1 MT DL VIOLET 3390601 06.10.2015 18,26,28,609 2 MT SC SHANGHAI 3969887 05.11.2015 18,99,34,169 3 MT ORIENTAL 4737231 16.12.2015 19,85,18,125 JASMINE 4 MT SYPRESS 5081561 04.01.2016 18,30,27,359 5 MT SEOYOUNG 5425948 22.01.2016 19,02,42,123 6 MT LADY SINA 5807936 11.02.2016 19,01,62,209 7 MT S C BRILLIANT 6256986 04.03.2016 19,57,33,549 Page 3 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022 C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022 8 MT DL VIOLET 6916754 06.04.2016 20,45,15,306 9 MT YM MIRANDA 7800662 23.05.2016 23,12,47,009 10 MT BOMAR JUPITAR 8398876 21.06.2016 21,59,53,187 11 MT SEA CYRSTAL 8832816 13.07.2016 22,53,82,569 12 MT BHAIRAVI 9391529 11.08.2016 22,79,90,005 13 MT DL VIOLET 2318028 19.11.2016 25,99,96,327
8. It is the case of the assessee as evident from the connected writ application, that as the export of Benzene falls under the tariff item 2902 20 00 being the notified goods under the Public Notice No. 44/2015-20 dated 29.10.2015, it was eligible to get export incentives / benefits under the MEIS. In accordance with the provisions enumerated in the Public Notice No.09/2015-20, the exporter was required to declare his intention to claim the rewards under the Scheme (MEIS) by marking / ticking of "Y" (Yes) in "Reward" column of the shipping bills against each item.
9. The Customs Broker of the assessee committed a mistake by marking "N" (No) instead of "Y" (Yes) in the "Reward" column in all the disputed shipping bills. When the Let Export Orders (LEOs) against the aforesaid shipping bills were granted, the assessee realized the mistake committed by it.
10. In such circumstances referred to above, the assessee approached the Customs Authorities on 09.08.2018 with a request / permission for manual amendment in the shipping bills.
11. The Additional Commissioner of Customs vide Order in original dated 6/9/2019, rejected the request of the Assessee for Page 4 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022 C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022 amendment in the shipping bills under section 149 of the Customs Act, holding that as per para 5 of the circular No. 14/2015 dated 20/4/2015 issued by the CBEC, New Delhi, which refers to the Foreign Policy Handbook of Procedures para 3:14, the declaration on shipping bills for intent of reward on goods was mandatory for all the shipping bills filed after 30/9/2015 and that in the case of the Assessee, all the shipping bills were filed after 30/9/2015 and no declaration of their intent to avail benefit of the scheme was made on the body of the shipping bills. It was further held that in the absence of any document to indicate that at the time of export the Assessee intended to avail benefit under the MEIS scheme, the writ applicant cannot be allowed to amend its shipping bills after the Let Export Order (LEO) and further in light of the Circular 36/2010 Customs dated 23.09.2010, the application for amendment was made after 2-3 years which was beyond the period of limitation as stipulated in the said circular. In view of the aforesaid, the Additional Commissioner of Customs dismissed the request of the Assessee to amend the shipping bills.
12. Being aggrieved by the order of the Additional Commissioner of Customs, the Assessee filed an appeal before the Commissioner of Customs (Appeals) who vide Order In Appeal dated 01.04.2019 upheld the Order in original and dismissed the Assessee's Appeal.
13. Aggrieved by the Order-In-Appeal dated 01.04.2019, the assesses approached the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad, wherein vide final order dated 10.01.2020, the Tribunal allowed the Appeal of Page 5 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022 C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022 the Assessee holding that the issue is covered by a decision of the High Court of Kerala and further held that the amendment claimed by the Assessee is not in the nature of change of the shipping bills. The Assessee was not intending to change the description or quantity of goods which may require some inquiry. The assessee only intend to amend the shipping bills so as to mention their intention to avail the benefit of a particular scheme. The benefit of amendment under Section 149 of the Customs Act could not have been denied.
14. Aggrieved by the order of the Tribunal dated 10.01.2020, the Revenue has filed the present Tax Appeal. Simultaneously, the writ application being the Special Civil Application No.318 of 2022 has been filed by the Respondent assessee praying for directions to the Customs Department to implement the order of the Tribunal and permit to amend the concerned shipping bills and further declaring that the time limit of 31.12.2021 prescribed under the trade notice dated 02.11.2021 issued by the Directorate General of Foreign Trade for filing application under MEIS is arbitrary and unlawful or in the alternative, directing the respondent No.4, Directorate General of Foreign Trade, to permit the assessee to file their application under the MEIS even after 31.12.2021 so as to extend the benefit.
15. We have heard Mr. Lodha, the learned senior standing counsel appearing for the Revenue and Mr. P.V. Sheth, the learned counsel appearing for the assessee.
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16. The Tribunal while allowing the appeal filed by the assessee has observed in para 4 as under:
"I have considered rival submissions. I find that the issue is covered by the decision of High Court of Kerala in the case of Saint Gobain India (supra). Moreover, I find that the amendment claimed by the appellant is not in the nature of change in the shipping bills which may require evidence to prove. They are not intending to change description of goods or quantity of goods which would require any documentary evidence. The only thing they are requiring to amend their shipping bill is their intention of avail the benefit of a particular scheme. In these circumstances, the benefit of section 149 of the Customs Act cannot be denied. The appeal is, consequently, allowed."
17. Thus, the Tribunal took the view that the amendment claimed in the shipping bills cannot be said to be in the nature of changing the shipping bills, for which evidence may have to be led. According to the Tribunal, the assessee is not intending to change the description of the goods or quantity of the goods. The argument on behalf of the Revenue is that once the goods are exported, it is very difficult thereafter to undertake proper verification or rather physical verification of the goods even for the purpose of amendment in the shipping bills. The argument is that almost after a period of 2 years from the date of export, the assesee has claimed amendment in the shipping bills.
18. We are of the view that the argument of the Revenue as regards the delay would not hold good in view of the decision of this very High Court in the case of M/s. Mahalaxmi Rubtech Ltd. Vs. Union of India, Special Civil Application No.21636 of 2019 decided on 02.03.2021, wherein this Court took the view that Page 7 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022 C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022 Section 149 of the Act does not prescribe any time period and in such circumstances, the Circular, which was issued by the CBEC providing for three months time period to make a request for conversion from the date of the LEO was declared to be ultra vires Articles 14 and 19(1)(g) of the Constitution.
19. We are of the view that none of the three questions of law proposed by the Revenue referred to above could be said to be substantial questions of law. In the facts and circumstances of this case, we decline to interfere with the order passed by the Tribunal. In the result, the Tax Appeal fails and is hereby dismissed.
We would like to clarify that in a given case, the delay on the part of the assessee may assume importance. We have declined to entertain the Tax Appeal of the Revenue in the peculiar facts and circumstances of the case. This order shall not be cited as a precedent.
ORDER IN SPECIAL CIVIL APPLICATION No.318 of 2022:
In view of the order passed in the Tax Appeal as above, the reliefs prayed for by the assessee in the connected writ application should be granted. In fact, if the order passed by the Tribunal referred to above is to be given effect, the proper officer of the Customs Department will have to undertake the exercise of amending the disputed shipping bills at the earliest. Let the exercise of amending the shipping bills be undertaken at the Page 8 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022 C/TAXAP/183/2022 JUDGMENT DATED: 23/03/2022 earliest and completed within a period of six weeks from the date of receipt of writ of this order.
This writ petition is accordingly allowed and disposed of.
(J. B. PARDIWALA, J) (NISHA M. THAKORE,J) Y.N. VYAS Page 9 of 9 Downloaded on : Sat Dec 24 13:28:50 IST 2022