Custom, Excise & Service Tax Tribunal
M/S. Vedanta Aluminium Ltd vs Cc&Ce, Visakhapatnam on 29 January, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.C/25029/2013 (Arising out of Order-in-original No.63/2012(BVSNK) dt. 09/10/2012 passed by CCE,C&ST, Visakhapatnam) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member(Judicial) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Vedanta Aluminium Ltd. ..Appellant(s) Vs. CC&CE, Visakhapatnam ..Respondent(s)
Appearance Shri Karan Talwar and Shri G. Prahlad, Advocates for the appellant.
Shri Pakshi Rajan, Asst. Commissioner(AR) for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:29/12/2015 Date of decision:29/12/2015 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The appellants are aggrieved by the rejection of their request for conversion of free shipping bill to DEPB scheme shipping bill.
2. The appellants are manufacturers of Calcined Alumina and export the same under concessional duty EPCG scheme along with DEPB benefit provided by the Foreign Trade Policy. The appellants exported 6 consignments from Visakhapatnam Sea Port and two consignments from Kakinada Sea Port. The appellants shipped 26500 MTS of Calcined Alumina vide Shipping Bill No.8101548 dt. 17/06/2008 for a FOB value of Rs.45,74,06,250/-. It is the case of the appellant that due to clerical error on the part of the appellants CHA, the shipping bill dt. 17/06/2008 was filed as a free shipping bill instead of a DEPB scheme shipping bill. On realizing the same, the appellants vide letter dt. 24/12/2008 informed the matter to the Assistant Commissioner. Again on 19/02/2009, they addressed another letter to the Additional Commissioner for conversion of the free shipping bill to DEPB shipping bill. The appellants request for conversion was rejected and the same was informed to the appellants vide letter dt. 13/04/2009. The appellant preferred an appeal to the Commissioner(Appeals) against the said decision of rejection. The Commissioner(Appeals) vide Order-in-Appeal dt. 12/08/2009 held that since the declaration by the appellants to claim DEPB benefit was available on the ARE1 2008-09/66 during the material period, the request for amendment of the shipping bill in terms of Section 149 of the Customs Act, 1962 ought to have been granted. With this view, the Commissioner(Appeals) remanded the matter for fresh adjudication by the adjudicating Commissioner. An appeal was preferred against the said remand order by the Department before the Tribunal. The Tribunal vide Final Order No.427/2010 dt. 16/02/2010 upheld the view expressed by the Commissioner(Appeals) and held that the request for conversion of the free shipping bill to DEPB shipping bill needs to be reconsidered by the Commissioner. The Department moved the Honble High Court of Andhra Pradesh against the order of the Tribunal. The High Court vide order dt. 18/01/2012 disposed the appeal filed by the Department and held that the adjudicating Commissioner has to take an independent decision in the matter and that the observations made by the Commissioner(Appeals) would not have any impact on such decision. Accordingly the matter was adjudicated de novo and vide Order-in-Original dt. 09/10/2012 which is impugned herein, the request for converting the free shipping bill dt. 17/06/2008 into DEPB shipping bill was rejected on the following grounds:-
a. the request for conversion has been filed around 8 months after filing of Export General Manifest and therefore is time barred;
b. the delay in filing the request for conversion reflects the absence of intention on the part of the appellant to claim the DEPB benefit;
c. amendment of shipping bill under Section 149 of the Customs Act, 1962 cannot be claimed as a right; and d. as per Boards Circular No./2004-Cus. Dt. 16/01/2004, the conversion of free shipping bill into DEPB shipping bills is not allowed.
3. Aggrieved by the above Order-in-Original, the appellants have preferred the present appeal.
4. The learned counsel for the appellant contended that though the appellant failed to mention the DEPB details on the shipping bills, the same was mentioned in the ARE1 and other documents. The DEPB declaration was not filed with the shipping bill No.8101548 dt. 17/06/2008 only due to a clerical error on the part of the CHA. He pointed out that out of 772.724 MTs exported under ARE1 No.2008-09/66, a quantity of 386.231 MTs was exported under shipping bill no.8101548 wherein the DEPB benefit was not claimed. But for the remaining quantity of 386.231 MTs vide shipping No.8101862, the appellant had filed DEPB declaration and the benefit was claimed. The learned counsel urged that this would show that it was only a mistake on the part of the agent at the time of filing the shipping bill and that the appellants always intended to avail the DEPB benefit. Further that as per Section 149 of the Customs Act, 1962, the appellants can seek amendment of the shipping bill on the basis of documentary evidences which was in existence at the time when goods were exported. That in the ARE1 covering the same shipping bill, the appellant has mentioned about DEPB declaration. The non-mention of the same on the shipping bill was only an omission on the part of the appellants agent. The intention to claim the DEPB benefit is evidenced by the endorsement made on the ARE1 attached to the shipping bill. It was also argued that Section 149 does not lay down any time limit for amendment of shipping bill.
5. The learned AR reiterated the findings in the impugned order and argued that as per Boards circular No.4/4/2004-Cus. Dt. 16/01/2004, conversion of free shipping bills into advanced licence/DEPB/DFRC shipping bills is not allowed. As regards permitting conversion of shipping bills from one export promotion scheme to another concerned, the circular clarifies that such conversion should only be allowed where the benefit of an export promotion scheme claimed by the exporter has been denied by the DGFT/MOC or Customs due to any dispute. The circular also lays down a condition that the request for conversion has to be made by the exporter within one month of the denial/rejection of the benefit claimed. It is submitted that in the present case, the request for conversion was made after lapse of around 8 months from the date of export. That this itself shows that the appellants did not have the intention to claim the DEPB benefit while submitting the shipping bill. Therefore the Commissioner has rightly rejected the request for conversion of free shipping bills into DEPB shipping bills.
6. I have considered the submissions made by either side carefully. The issue involved is conversion of free shipping bills into DEPB shipping bills. It is the case of the appellants that at the time of filing the shipping bills dt. 17/06/2008, they were eligible to avail DEPB benefit against exports made, but had omitted to mention the same in the shipping bill. It is seen from the documents that 772.724 MTs of Calcined Alumina was cleared from their factory for export under ARE1 No.2008-09/66 dt. 25/05/2008. It was declared in the said ARE1 form that the export is in discharge of the export obligation under EPCG licence No.05301378737/2/11/00 dt. 12/01/2005 and benefit under DEPB scheme is to be availed. The same is seen certified by the Customs Officer. It is recorded therein that a quantity of 386.231 MTs out of the total quantity (772.724 MTs) cleared is to be shipped under Shipping Bill No.8101548 dt. 17/06/2008 and the remaining quantity of 386.231 MTs is to be shipped vide Shipping Bill No.8101862 dt. 30/07/2008. The shipping bill No.8101862 dt. 30/07/2008 is filed by appellants under EPCG and DEPB scheme and the benefit was availed. The shipping bill No.8101548 dt. 17/06/2008 which is subject matter of the present dispute was filed as a free shipping bill and DEPB benefit could not be availed. When the appellants claimed DEPB benefit for part of the quantity of 772.724 MTs shown in ARE-I, it can be safely inferred that the non-declaration of the DEPB benefit in the shipping bill No.810548 dt. 17/06/2008 was only due to a clerical error. So the observation made by the Commissioner that the appellants did not declare the DEPB benefit because they did not intent to avail DEPB benefit cannot be accepted.
7. Section 149 of the Customs Act provides for carrying out an amendment to the Bill of Entry or shipping bill on the basis of documentary evidences existing at the time of clearances or export of goods. The said section is reproduced below:-
Section 149. Amendment of documents Save as otherwise provided in Sections 30 and 41, the proper officer may, in his discretion, authorize any document, after it has been presented in the custom house to be amended;
Provided that no amendment of a bill of entry or a shipping bill or bill of export shall be so authorized 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.
Though the appellants omitted to declare the DEPB benefit on the shipping bill, they have clearly declared the same in the ARE1 forms in respect of the said shipping bill. Therefore there was sufficient documentary evidence available at the time of export indicating that the appellants were eligible to avail the DEPB benefit. The eligibility of the appellants has not been disputed by the respondents and the request has been rejected on the ground of being time barred and also basing upon the Boards circular No.4/2004. The learned counsel for the appellant has placed reliance on the following decisions:-
a. Prathiba Pipes & Structural (P) Ltd. Vs. CC(EP), Mumbai [2014(314) ELT 161 (Tri. Mumbai)] b. Kiran Pondy Chems Ltd. Vs. CC, Chennai [2006(203) ELT 588 (Tri. Chennai)] c. Man Industries (I) Ltd. Vs. CC(EP), Mumbai [2006(202) ELT 433 (Tri. Mumbai)]
8. In Kiran Pondy Chems Ltd. (supra), the Tribunal has observed as under:-
5. In the instant case, as we have already noted, the exports in question were made under cover of Shipping Bills and allied documents including ARE-1s. We have seen specimens of these ARE-1s. Part A of ARE-1 is a certification by the Central Excise Range Superintendent regarding clearance of the goods for export. Part B of this document is a certification by the proper officer of Customs, which certified that the export of goods was supervised by him. These documents (ARE-1s) clearly indicate that the exports were made under the DEEC Scheme. These documents were available at the time of export and were seen by the proper officer of Customs who supervised the exports. Thus the documentary evidence contemplated under the proviso to Section 149 ibid was in existence at the time of exports. Had situations of this kind been conceived, and the above provision of law been noted, by the Board, the circular would not have placed any embargo on the Commissioners of Customs in the matter of permitting conversion of free SBs to DEEC SBs. .
9. In the above judgments, the Tribunal has held in favour of the assessee and allowed conversion of the shipping bill under Section 149 of the Customs Act. The appellant in the present case has sought amendment of document (shipping bill) under Section 149 of the Customs Act, 1962. When the appellant has satisfied the requirements of the proviso under Section 149, the Commissioner ought to have allowed the request for conversion instead of disallowing the same by applying the Boards circular No.4/2004. It is also to be stated that Section 149 does not lay down any time limit for seeking amendment of the documents. In Man Industries (I) Ltd. (supra), the Tribunal observed as under:-
2.1. . . It is not in dispute that the requirements of abovementioned proviso are satisfied by the appellant and consequently Commissioner ought to have allowed the request for conversion in stead of bound by the terms of a Board circular which laid down certain situations, only in which conversion was permitted. That the appellants case was not specifically covered by one of the situations contemplated in the Boards circular cannot deny the appellants statutory right, to seek any amendment & same is lost. The statutory right, as also the statutory obligation of the proper officer to amend a document after its presentation in the Customs House cannot be curtailed or set to naught by circulars of the Board. The approach adopted by the respondent has the effect of inferring from & conferring upon the Board circular, a status of a statute overruling the proviso to Section 149 of the Customs Act, 1962 which is impermissible.
10. From the foregoing, I am of the view that the rejection of the request for conversion of shipping bills is unjustified. Applying the ratio laid in the above judgments which are applicable to the facts of the case, I hold that the impugned order is not sustainable.
11. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Operative portion of this order was pronounced in the court on conclusion of hearing) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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