Custom, Excise & Service Tax Tribunal
Alfa Laval (India) Ltd vs Commissioner Of Customs (Ep), Mumbai on 23 January, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. C/698/07 (Arising out of Order-in-Original CAO No. 76/2007/CAC/CC/KAP dated 5.6.2007 passed by Commissioner of Customs, Mumbai) For approval and signature: Hon'ble Ms. Jyoti Balasundaram (Vice President) and Hon'ble Mr. A.K. Srivastava, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Alfa Laval (India) Ltd. Appellant Vs. Commissioner of Customs (EP), Mumbai Respondent Appearance: Shri V.S. Nankani, Advocate, for appellant Shri R.B. Tiwari, Authorised Representative (Jt. CDR), for respondent CORAM: Hon'ble Ms. Jyoti Balasundaram, Vice President and Hon'ble Mr. A.K. Srivastava, Member (Technical) Date of Hearing: 23.1.2008 Date of Decision: 23.1.2008 ORDER NO................................. Per: Ms. Jyoti Balasundaram, Vice President
Permission sought by the appellants who are manufacturers of various industrial machinery and who had obtained advance licence dated 15.4.1999 for import of various inputs with obligation to export separators of a particular model for conversion of 15 drawback shipping bills filed for export of separators to DEEC shipping bills, has been denied on the ground that as per CBEC circular Nos. 6/2003 dated 28.1.2003, 40/2003 dated 12.5.2003 and 4/2004 dated 16.1.2004, conversion can be permitted only on satisfaction of the following conditions:-
i) On the basis of available export documents, the use of inputs is satisfactorily proved in the resultant export products;
ii) Examination and other endorsements on the shipping bills or export documents to satisfy the requirements of the export promotion scheme into which the conversion is sought;
iii) Export has not availed the benefit of export promotion scheme in the first instance and no fraud or manipulation etc. is suspected, while the endorsements made in the shipping bills filed by the appellants herein do not indicate that there was any examination carried out with reference to the DEEC scheme as per which it should be established that inputs imported duty free have been utilised in the manufacture of the declared export products and the SION norms are satisfied. Further, the ground for rejection of the request for conversion in respect of seven shipping bills filed subsequent to 15.11.2000 is that the exports had taken place beyond the export obligation period.
2. We have heard both sides.
3. We find that in the case of Man Industries (India) Ltd. vs. CC, Mumbai reported in 2005 (184) ELT 39 involving identical issue, the Tribunal set aside the rejection of the permission for conversion of DEPB shipping bills to DEEC shipping bills on the basis of the circular of 2004 and remanded the issue of entitlement of the appellants to conversion on the basis of the circulars and decisions of the Tribunal in Smruti Pottery Works vs. CC, Kandla 2004 (163) ELT 184 and Sanghi Industries Ltd. vs. CC, Jamnagar 2005 (179) ELT 44, to the Commissioner for fresh decision; post remand, the Commissioner once again rejected the request for conversion, the appellants filed appeal No. C/4/06 which was disposed of by order reported in 2006 (202) ELT 433 holding that the request for conversion is to be considered in the light of the statutory provision contained in Section 149 of the Customs Act, 1962 which entitles the proper officer of customs to direct amendment of any document after it has been presented in the customs house subject to the condition contained in the proviso to the section, which reads as under:-
"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 case may be."
The Tribunal allowed the conversion in that case, since the entire claim of the appellants was established on the basis of documentary evidence already in existence at the time of export, in the form of chartered engineer's and range Superintendent's certificates. The relevant extract from the Tribunal's order is reproduced herein below:-
"2.1 The request of the appellant for conversion of the Shipping Bills was made in terms of the statutory rights available to the appellant under Section 149 of the Customs Act, 1962. The said section entities the proper officer of Customs to direct amendment of any document, after it has been presented in the Custom House. By the application of conversion of the Shipping Bill, appellant was requesting the proper officer, to exercise this statutory power vested in such authority, to amend a Shipping Bill. The statutory conditions subject to which such amendment could or could not be made is described in the proviso to Section 149 of the Customs Act, 1962, which reads as:
"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."
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 instead 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 Board's Circular can not 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 Custom 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.
2.2 The Commissioner has clearly overlooked only circulars which are benevolent to the assessee that are binding upon the department and not circulars which seek to curtail statutory rights. This proposition is clearly laid down by the Hon'ble Supreme Court in the case of Collector of Central Excise, Patna vs. Usha Martin Industries, 1997 (22) RLT 221 (SC) = 1997 (94) ELT 460 (SC), wherein it was held that :
"21. Through a catena of decisions this Court has pronounced that Revenue cannot be permitted to take a stand contrary to the instructions issued by the Board. It is a different matter that an assessee can contest the validity or legality of a departmental instruction. But that right cannot be conceded to the department, more so when others have acted according to such instructions......"
The Supreme Court thus makes it clear that while a benevolent Circular is binding on the department and an assessee is always entitled to dispute the applicability & correctness of a Board's Circular. By application of this principle, it ought to be held that even if the appellants case did not fall within four corners of the Board's Circulars in question, the claim was eligible for consideration independently subject to provision of Section 149 of the Customs Act, 1962 and, in view of the facts and circumstances of the case, particularly the undisputed position that the entire claim for conversion of the Shipping Bills was based on documentary evidences in form of Chartered Engineers, & Range Superintendent of Central Excise certificates, arrived at on documents and material anterior to export i.e. which were in existence at the time of export of the goods, as is the requirement in the proviso to Section 149.
2.3 Since the entire claim of the appellant is established on the basis of documentary evidence already in existence at the time of export, there was no valid reason for the Commissioner to have refused such an amendment. The impugned order passed is therefore clearly untenable and is to be set aside."
4. In the present case, the appellants submit that they are in possession of evidence in the form of consumption register etc. to establish the use of the inputs imported duty free in the manufacture of resultant export products, i.e. separators. They pray that the case may be remanded to the Commissioner to satisfy himself that the conditions governing the DEEC scheme, viz. the use of the inputs imported duty free in the manufacture of resultant export products, were satisfied by them. We see merit in this submission. We also note that as regards the shipping bills covering exports made subsequent to November 2000, the issue whether the same are to be accepted towards discharge of export obligation (theses exports had taken place after the expiry of the prescribed period for fulfillment of export obligation) is to be determined by the licensing authority at the time of amendment of the said licence (the request for amendment is stated to be still pending with the licensing authority) and, therefore, the Commissioner's rejection of the request for conversion on the ground that the goods covered by these seven shipping bills were exported after the expiry of the export obligation period, cannot be sustained.
5. In the light of the above and following the ratio of the Man Industries decision cited supra, we set aside the impugned order and remand the case to the Commissioner for fresh decision on the request for conversion after satisfying himself that the appellants have fulfilled the requirements of the DEEC scheme into which they seek conversion.
6. The appeal is thus allowed by way of remand.
(Pronounced in Court) (A.K. Srivastava) Member (Technical) (Ms. Jyoti Balasundaram) Vice President tvu 1 6