Gujarat High Court
Commissioner Of Customs vs M/S. Psl Ltd on 2 July, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 430 of 2007
With
R/TAX APPEAL NO. 431 of 2007
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes
No
✔
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COMMISSIONER OF CUSTOMS
Versus
M/S. PSL LTD,
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Appearance:
MR ANKIT SHAH(6371) for the Appellant(s) No. 1
MR MONAL DAVAWALA for MR ANAND NAINAWATI(5970) for the Opponent No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 02/07/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Heard learned advocate Mr. Ankit Shah for the appellant and Mr. Monal Davawala for learned advocate Mr. Anand Nainawati for the respondent.
2. These Appeals are admitted by order dated 12.03.2007 on the following two substantial questions of law :-
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NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined "1. Whether the benefit of conversion of free shipping bill into one under the DFRC Scheme be sustained in absence of proof of use of inputs imported duty free in the resultant export product by the exporter?
2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in allowing substitution of the words "under claim of DFRC" in the free shipping bill in absence of satisfaction of the conditions prescribed under Circular No. 6/03 dated 28.01.2003."
2. Learned advocate Mr. Monal Davawala has sought permission to file his appearance. Permission is granted.
3. At the outset, learned advocate Mr. Monal Davawala submitted that he has instructions to appear for the respondent and the respondent - Company has been subjected to IBC (Insolvency and Bankruptcy Code) proceedings and the National Company Law Tribunal (NCLT) by order dated 16.05.2025 passed under Section 60(5)of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016 has granted the reliefs, Page 2 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025 NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined and concession sought by the subsequent successful auction purchaser which includes that any reopening proceedings, litigation involving the respondent assessee as on the date of the sale certificate dated 01.01.2025 would stand abated and no fresh claim or proceedings can be initiated. The National Company Law Tribunal relying upon the decision of the Hon'ble Apex Court in the case of Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., reported in (2021) 9 SCC 657, granted such relief and concession so as to achieve the objective of reviving the Corporate Debtor as a going concern in consonance with the clean slate principle to maximize value and ensure operational continuity. It was, therefore, submitted that both these appeals are required to be disposed of in view of the order passed by the National Company Law Tribunal which is binding upon the appellant.
4. Learned advocate Mr. Ankit Shah for the appellant submitted that the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai (For Short "the Tribunal") vide order dated Page 3 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025 NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined 18.08.2006 has permitted the amendment in the shipping bill filed by the respondent assessee contrary to the Circulars issued by the Board which prohibited the conversion of the free shipping bill into one under DFRC (Duty Free Replenishment Certificate) scheme as there was no proof of use of inputs imported duty free in the resultant export product by the exporter. It is further submitted that the Tribunal could not have permitted the respondent assessee to amend the shipping bill for amendment under Section 149 of the Customs Act, 1962 since the examination referred to in the Circular No. 6 of 2003 dated 28.01.2003 as well as Circular No. 4 of 2004 dated 16.01.2004, prohibits such conversion of shipping bill under DFRC. It was therefore, submitted that the questions of law may be answered in favour of the Revenue subject to the order which has been passed by the National Company Law Tribunal.
5. Having heard the learned advocates for the parties, the facts emerging from the record can be summarized as under :
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NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined
6. The respondent assessee filed three shipping bills dated 29.04.2004, 01.05.2004 and 02.05.2004 at Mundra Port and two free shipping bills on 02.04.2004 and 06.04.2004 at Kandla Port to export polyethylene coated steel pipes. The respondent assessee after dispatched of the consignments requested the respective Assistant Commissioner of Customs to convert the free shipping bills into the DFRC shipping bills on the ground that the consignments were urgently required by the buyer and they could not wait to follow the procedure under the DFRC scheme. However, the respondent assessee during the course of hearing before the Assistant Commissioner of Customs submitted a copy of the contract dated 20.01.2004 and represented that after amendment of Section 128A of the Customs Act, the Commissioner (Appeals) has power to remand and submitted that the goods exported are covered by SION # C1289 to C1291 backed by inspection report and therefore as per the terms and conditions of the EXIM Policy, the amendment sought by the respondent assessee could not have been denied under Section 149 of the Customs Page 5 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025 NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined Act.
7. On being aggrieved by the rejection of the amendment sought by the respondent assessee, an appeal was preferred before the Commissioner (Appeals) who by order dated 22.12.2004, rejected both the appeals on the ground that how to verify the description of the goods with reference to the parameters and specifications required by respective SIONs could not be answered by the respondent assessee as the goods were not available having been already exported and therefore, the amendment was not rightly granted by the authority. The respondent assessee being aggrieved, challenged the order before the Tribunal who by common impugned order dated 18.08.2006 allowed the appeals by observing as under :-
"2. The issue involved is the request for amendment of the Shipping Bill filed at Kandla Port and Mundra Port, as a duty free shipping bill as prescribed under the Regulations. The applications were made to the proper officer to amend the declaration on the said shipping bills due to ministerial errors and to add the words "under the claim of DFRC". These amendments, as requested for, could have been granted by the proper officer under the provisions of Section 149 of Customs Act, 1962. However, the lower Page 6 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025 NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined authorities following Board's instructions No. 6/03-Cus dated 28.01.2003 did not grant this request as made. Hence, the present appeals before me.
3. The regulations prescribing the proforma, to be filed of the Shipping Bills, has been laid down by the Board. These regulations did not prescribe any separate identifiable proforma for exports under the DFRC Scheme. Therefore, this is a case of conversion of a kind of Shipping Bills as provided for under Regulations into another kind. This request made was for a clerical correction/interpolation of the export under the claim for DFRC, a request which could have been granted under Section 149 of the Customs Act, 1962 since have been effected against the same contract for which the subsequent period DFC has been claimed and granted.
4. In view of the above findings, I find no reason to deny the amendments sought under Section 149 of the Customs Act, 1962 to interpolate the word "under claim for DFRC" on the said Shipping Bill. The reason of the lower authorities of the goods having been shipped do not justify the denial of the interpolation of the said words since the examination referred to as the goods which obviously are not available at the time when the request made would not later the not duty paid Shipping Bill with the words interpolated or other wise."
8. Considering the above observations of the Tribunal, it is apparent that the respondent assessee only sought an amendment of the shipping bill under Section 149 of the Customs Act to interpolate the words "under claim for DFRC" on the said shipping Page 7 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025 NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined bill and the Tribunal has rightly come to the conclusion that the reason assigned by the lower authorities of goods having been shipped do not justify the denial of the interpolation of the said words as the goods were not available when the request was made to amend the bill. The Tribunal has also taken into consideration that the request which was made by the respondent assessee under Section 149 of the Customs Act, 1962 to amend the bill is already in pursuance of the contract which was provided by the respondent assessee for the subsequent period when DFRC was claimed and granted.
8.1. In view of the above findings of fact arrived at by the Tribunal we are of the opinion that no question of law much less any substantial question of law would arise from the impugned order of the Tribunal and, therefore, the questions of law are answered in favour of the assessee and against the Revenue, more particularly, when question no. 1 would not arise in the facts of the case as the conversion of shipping bill for the one under DFRC scheme has no relevance in absence of proof of use of inputs Page 8 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025 NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined imported duty free in the resultant export product by the exporter as the issuance of DFRC under the scheme envisages duty free imports of the inputs. Therefore, question no. 1 which refers to the benefits of conversion of the free shipping bill into DFRC does not arise from the impugned order of the Tribunal as the controversy involved in these appeals is only with regard to amendment of the bill and not granting benefit under DFRC scheme.
9. So far as question no. 2 is concerned, no submissions were made before the appellate authority or Tribunal regarding the rejection of the amendment in view of the Circular No. 6 of 2003 dated 28.01.2003 which is now superseded by Circular No. 4 of 2004 dated 16.01.2004 which was not even considered by any of the authorities.
10. In view of the above facts, both the appeals are dismissed on merits as well as in view of the order passed by the National Company Law Tribunal that no relief can be granted in favour of the Revenue as the pending litigations are not binding upon the Page 9 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025 NEUTRAL CITATION C/TAXAP/430/2007 JUDGMENT DATED: 02/07/2025 undefined subsequent successful auction purchaser in liquidation.
(BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) phalguni Page 10 of 10 Uploaded by PHALGUNI PATEL(HC00175) on Sat Jul 19 2025 Downloaded on : Fri Jul 25 22:28:03 IST 2025