Gujarat High Court
M/S Raj And Company vs Union Of India on 8 February, 2021
Author: Sonia Gokani
Bench: Sonia Gokani, Sangeeta K. Vishen
C/SCA/17804/2019 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 17804 of 2019
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M/S RAJ AND COMPANY
Versus
UNION OF INDIA
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Appearance:
MR PARESH V SHETH(3998) for the Petitioner(s) No. 1
MR PY DIVYESHVAR(2482) for the Respondent(s) No. 2,3
NOTICE SERVED(4) for the Respondent(s) No. 1
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CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
Date : 08/02/2021
ORAL ORDER
(PER : HONOURABLE MS. JUSTICE SONIA GOKANI)
1. By way of the present petition under Article 226 of Constitution of India, writ of mandamus or any other appropriate writ is sought by the petitioner to set aside the order of respondent No.3 bearing No.VIII/4847/EXP/MEIS/CHM/1920 dated 10.06.2019.
2. The facts bereft of details are as follows:
2.1 The petitioner regularly exports in his capacity of Merchant Exporter and is exporting various items purchased from different manufactures and traders. The scheme was introduced being the Merchandise Exports from India Scheme ('MEIS' for short). It specified Page 1 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER the entitlement and eligibility of various groups and also the benefits of the percentage. In terms of the Public Notice No.2 of 201520 dated 01.04.2015, Sri Lanka was placed in groupC. Although the benefit of MEIS was not made available to the product of vitrified tiles if exported to Sri Lanka.
2.2 It is averred by the petitioner that a Public Notice had been amended on 04.05.2016 being the Public Notice No.6 of 201520 and MEIS scheme was extended to the export made to Sri Lanka at the rate of 2% interest. The interest was further amended on 22.09.2016 vide Public Notice No.32 of 201520 and the rate of percentage was enhanced to 3%. According to the petitioner, both the amendments of 04.05.2016 & 22.09.2016 in Public Notices did not come to his knowledge. However, he had exported various consignments to Sri Lanka from the year 2015 to 2020, but on account of his lack of knowledge, he did not claim any benefit of MEIS scheme. On his Page 2 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER being aware of such Public Notices, he made a request to the concerned officer to allow him to amend the shipping bills under the provisions of Section 149 of the Customs Act, 1962; however, such request was not acceded to and the rejection came by referring to some Public Notices.
2.3 It is averred by the petitioner that the policy permits the eligibility of the goods which had been exported by the petitioner under the MEIS scheme and it is only the procedural lapse which has resulted into his being denied the benefit of the said scheme. The petitioner, has, therefore, approached this Court emphasising that mere lapse of procedural law shall not take away his substantial benefit by seeking the following prayers:
"12.
a. Your Lordships be pleased to issue a writ mandamus of or in the nature of mandamus quashing and setting aside the order passed by the Respondent No.3 issued from File Number VIII/48-47/EXP/MEIS/CHM/19-20 Dated 10.06.2019.
b. Your Lordship be pleased to issue a writ of Prohibition or in the nature of Prohibition thereby completely and permanently prohibiting Respondent No.3 from taking any action against the petitioner, for disturbing the benefits available.Page 3 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER
c. Such other and further relief as deemed just and expedient be granted."
2.4 Notice came to be issued on 16.10.2019 and the respondents appeared and filed affidavitin reply for and on behalf of respondent Nos.2 and
3. Assistant Commissioner, Customs, Mundra has raised the challenge of availability of alternative remedy so also for other purpose.
3. According to the respondents, the petitioner took more than one year to realise the publication of the notices which have permitted the benefits of MEIS export policy to the petitioner. The Public Notices have been issued by the Director General of Foreign Trade ('DGFT' for short), which is also binding on Central Board of Indirect Taxes and Customs ('CBIC' for short). It is further contended that the guidelines issued in Public Notices shall have to be followed by the CBIC and therefore, the rejection of the claims is provided under the said Public Notices. The Public Notices No.40/15 20, 47/1520 and 9/1520 issued by the DGFT also Page 4 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER can be applied; however, the custom authority needs to prescribe to learn to follow the procedure. The Public Notices would permit the benefits to those exports which had been made from 01.04.2015 to 30.09.2015; whereas in the instant case, the exports have been made from 12.05.2016 to 05.01.2017 which is beyond the time limits given by the DGFT. The procedure of declaration of intent as provided in para 3.14, according to the respondent of the Handbook of Procedures of Foreign Trade Policy ('FTP' for short) 201520 for Electronic Data Interchange ('EDI' for short) has been simplified. The marking of the tick done in pursuance of the earlier Public Notice No.47 dated 08.12.2015 is to be treated as declaration of intent in case of EDI shipping bills. It is, therefore, contended that the marking to the tick in appropriate box since was mandatory even in EDI shipping bills, it is clear that from 30.09.2015, once the marking is mentioned by the exporter, the same is to be treated final and no amendment can be Page 5 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER entertained. So far as section 149 of the Customs Act, 1962 is concerned, it is contended that the amendment can be made on the strength of the documentary evidence which is in existence at the time of exports. In the instant case, there are 73 shipping bills where exporters have mentioned in the area as "N"(NO) in the column of reward and therefore, it cannot be now made available the benefits. It is further contended that nearly a year's time has lapsed and therefore also, the petition does not deserve any entertainment.
4. Affidavitinrejoinder has been filed by the respondent wherein the emphasis has been that in complete disregard to the various decisions of the High Court and the Apex Court, the stand has been taken by the respondent authority and hence, the same cannot be regarded.
5. We have heard the learned advocate, Mr.Paresh Sheth appearing for the petitioner, who has extensively argued along the line of the memo of petition and he has also urged that genuine 73 shipping bills are placed for being considered by the Page 6 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER exporter. It is only the pure and simple mistake and the petitioner cannot be denied the benefits which are otherwise meant for the exporters only on account of the service, mechanically. He has sought to rely on the decision of this Court rendered in case of Messrs Gokul Overseas vs. Union of India, reported in (2020) 373 ELT 49, the decision of the Madrash High Court rendered in case of Pasha International vs. Commissioner of Customs, Tuticorin, reported in 2019 (365) E.L.T. 669(Mad.) and also of Saint Gobain India PVT. LTD. vs. Union of India, reported in 2018 (361) E.L.T.1000(Ker.)
6. Learned central government standing counsel, Mr.Parth Divyeshvar appearing for the respondents has, per contra, strongly objected to allowing of this petition on the ground that subsequent Public Notices have been regarded aptly by the Deputy Commissioner, Exports and therefore, the communication dated 10.06.2019, which is under challenge, is in accordance with the policy, no Page 7 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER interference is necessary. He has relied on the FTP from 01.04.2015 to 31.03.2016 and particularly clause 2.58 concerning Exemption From Policy/ Procedure and 3.14 Transitional Arrangement.
6.1 He has also relied on section 149 of the Customs Act, 1962 to urge that it is a clear intent on the part of the exporter not to avail the benefit of reward which otherwise is made available to the exporter. It is also, according to him, quite unbelievable that the person who exports on the continuous basis would be unaware of the benefits declared by way of the Public Notice. What all CBIC has done is to follow the DGFT and therefore, no indulgence needs to be shown in this case. He has also attempted to distinguish the decisions which are sought to be relied on facts.
7. Having thus heard the learned advocates on both the sides and also having noticed that the case of the petitioner falls under the MEIS which is a scheme meant for promoting the export, these are the rewards under the MEIS payable as Page 8 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER percentage mentioned in the scheme itself can be transferred for the payment of number of duties and taxes. As can be gathered from material which has been placed on the record is that Sri Lanka was placed in GroupC in the Public Notice No.2 of 2015 dated 01.04.2015. In Gazette of India, the Ministry of Commerce and Industry, Department of Commerce provided in exercise of the powers conferred under para 2.04 of the FTP 201520, the schedule of country groups and the code wise list of product with reward rates under Appendix 3B as pointed out to us that Sri Lanka is not one of those country. It is not in dispute that by way of 73 shipping bills, export has been carried out by the petitionerexporter and he has substantiated the same by way of the documentary evidences, which had happened from 12.05.2016 to 05.01.2017. The Public Notice had been amended firstly on 04.05.2016 and thereafter, on 22.09.2016 whereby Sri Lanka was included and export to Sri Lanka has also been covered under the scheme of MEIS at the rate of 2% and 3% Page 9 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER respectively.
7.1 Reference also needs to be made at this stage of the Public Notices No.40/1520 dated 09.10.2015 and 47/1520 dated 08.12.2015. This reference to the Public Notice No.40/1520 dated 09.10.2015 of DGFT which prescribed the procedure to be followed for claiming rewards under MEIS where exports had been made through EDI generated shipping bills between 01.04.2015 to 31.05.2015 and the exporter had inadvertently marked 'N' in the reward item box and then has wished to seek MEIS benefit. The representation was received from exporters by the trade & industry, that such procedure should also be made applicable to exports made beyond 31.05.2015. To redress this issue in exercise of powers conferred under paragraph No.1.03 of the FTP 201520 read with paragraph No.3.14 of the Handbook of Procedures of FTP 201520, DGFT allowed the procedure for the exports which had been carried out between 01.06.2015 to 30.09.2015 through EDI generated Page 10 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER shipping bills where the exporter has inadvertently marked 'N' in the reward item box, but has declared his intention in the affirmative on the shipping bill.
7.2 It further specifies that the item level details for shipping bills related to exports from 01.06.2015 to 30.09.2015 which were not transmitted to DGFT because of declaring 'No' at item level and showing the negative intent for the reward scheme shall be identified and transmitted by the Director General (Systems) to DGFT so as to make available to the exporters to file the reward applications electronically with DGFT. It further provides that physical Export Promotion (EP) shall submit each shipping bill on the part of the exporters to the concerned Regional Authority (RA) to verify that the declaration of intent was made to exporter as provided in paragraph 3.14 of Handbook of Procedure ('HBP' for short) 201520 before allowing reward, subject to other provisions of Page 11 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER FTP/HBP. There are other details for those shipping bills which have been already transmitted to DGFT and 'N' has been declared in the reward item field where the exporter is obligated to submit the EP policy of shipping bills and reward. The shipping bills and reward are to be issued by the concerned Regional Authority (RA). It clearly states that the shipping bills where the declaration of intent 'Y' has not been marked and 'N' has been ticked inadvertently in the reward item box while filing shipping bills in customs for exports made between 01.06.2015 to 30.09.2015, shall be transmitted by Central Board of Excise and Customs to DGFT.
8. Public Notice No.09/201520 dated 16.05.2016 amends paragraph No.3.14 in the following manner:
"Amended paragraph No.3.14: Procedure for Declaration of Intent on EDI and Non EDI shipping bills for claiming rewards under MEIS including export of goods through courier or foreign post offices using e-Commerce
(a) (i) EDI Shipping Bills: Marking/ticking of "Y" (for Yes) in "Reward" column of shipping bills against each items, which is mandatory, would be sufficient to declare intent to claim rewards under the scheme. In case the exporter does not intend to claim the benefit of reward under Chapter 3 of FTP Page 12 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER exporter shall tick "N" (for No). Such marking/ticking shall be required even for export shipment under any of the schemes of Chapter 4 (includig drawback), Chapter 5 or Chapter 6 of FTP
(ii) Non-EDI Shipping Bills: In the case of non-EDI Shipping Bills, Export shipments 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."
This clearly provides that marking/ticking of 'Y' in reward column of shipping bills against each item, which is mandatory, would be sufficient to declare intent to claim reward under the scheme. If no reward is to be obtained, the exporters simply will have to tick it as 'N'. For NonEDI shipping bills, export shipments would be needed to follow the declaration on the shipping bills in order to be eligible for claiming rewards under MEIS, mentioning that the person intends to claim rewards under the MEIS. Such declaration shall be required even for export shipments under any of the schemes including the drawback. This essentially was to simplify the EDI and marking of the tick pursuant to the Public Notice dated 08.12.2015 to be treated as declaration of intent Page 13 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER in case of EDI shipping bills since the marking of tick in the appropriate tick boxes are mandatory in EDI shipping bills.
9. It is thus made clear from both subsequent notices that the procedure in case of the EDI has been simplified as the whole object is to facilitate and promote export and simplify the procedure and for getting the benefits from the policy which has been declared by the Union of India, both the Public Notices shall need to be regarded.
10. Apt would be to refer to the decision of Saint Gobain India PVT.LTD (supra) where the petitioner was private limited company, which had approached the competent respondents for correcting the bill of entry under Section 149 of the Customs Act, 1962 and the respondents had expressed their inability to permit the amendment of the shipping bills. This was necessitated as the petitioner company was at the time of making such a request was an amalgamated company and was Page 14 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER entitled to the benefit under the Foreign Trade Policy, 201520, which was enjoyed by the SEPR Refractories India Ltd. and the private limited company undergone the process of amalgamation with SEPR Refractories India Ltd. The statement had been made for and on behalf of the respondent there that the petitioner had approached competent respondents for amendment of the name and undergone the process of amalgamation with SEPR Refractories India Ltd. from that of SEPR to Saint Gobain India Pvt. Ltd., to avail the benefits under the Foreign Trade Policy and the contention raised was that after the introduction of electronic process in shipping bills, the amendments under Section 149 of the Customs Act,1962 cannot be done in the EDI system as no notification can be done in the system after the Export Order' is given. It is stated, however, that the 3rd respondent can issue a 'No Objection Certificate' to the petitioner for availing the MEIS benefit and the 4th respondent before Madras High Court was the authority to relax the policy Page 15 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER which needed to consider the said certificate to serve the petitioner's purpose. The Court directed the 3rd respondent to issue necessary 'No Objection Certificate' to the petitioner which the petitioner was directed to produce to the 4th respondent and seek the benefit from him which was directed to consider such claim and pass orders thereon expeditiously within a period of three months.
10.1 This was also referred to in case of Pasha International vs. Commissioner of Customs, Tuticorin (supra) where the writ petitioner was manufacturer and exporter of "Bags and madeups. It intended to claim benefit under MEIS and while filling up the shipping bills, the Writ petitioner inadvertently opted for "No" instead of "Yes". When the system was done manually, the corrections can be made in view of the enabling provision of Section 149 of the Customs Act, 1962 but with the EDI system the correction was not done and the Court held that the petitioner Page 16 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER cannot be allowed to suffer for an inadvertent mistake committed by him. It referred to the decision of Saint Gobain India PVT. LTD.(supra). The respondent was directed to issue N.O.C. to enable the petitioner to avail the benefit and thereafter to consider the benefit as may be available to the petitioner expeditiously.
11. This Court in case of Messrs Gokul Overseas (supra) was requested to direct the respondent to allow the benefits under the MEIS under five different applications and to accept the amendment in shipping bills with a declaration made by a separate communication. The petitioner was the partnership firm situated at Kandla Special Economic Zone and was engaged in the manufacturing of derivatives of Castor Oils and cleared its final product to export and was also a certified Three Star Export House. In MEIS, it sought to promote export of notified goods manufactured in India. The Court referred to five different kind of duties scrips with varying Page 17 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER conditions attached to their use and all these had merged into a single scheme MEIS. For export made during April, 2015 to January, 2016 the request was made to grant the benefit. The petitioners were requested to allow benefits on the shipping bills where declaration of intent was not mentioned prior to 01.06.2015 and also requested to extend the benefit of the Public Notice dated 09.10.2015 to NonEDI shipping bills.
In this background, the Court in detail considered the procedure for declaration of intent on EDI and NonEDI shipping bills as
provided under Chapter 3 of the FTP 201520 and also referred to the decision of Delhi High Court rendered in case of Kedia (Agencies) Pvt. Ltd. v. Commissioner of Customs, reported in 2017 (348) ELT 634 (Del.). In case of MESSRS GOKUL OVERSEAS (supra) the Court has held and observed thus:
"23. Chapter 3 of the Foreign Trade Policy 201520 has introduced the Merchandise Exports From India Scheme. The procedure for claiming benefit under the said scheme has been provided under the Handbook of Procedure to Foreign Trade Policy 201520. Para 3.14 thereof provides for the procedure for 'Declaration of Intent' on EDI and NonEDI shipping bills for claiming benefits under the MEIS, including export of goods through courier or foreign post offices using Page 18 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER eCommerce. Subclause (I) of clause (a) thereof provides the procedure for 'declaration of intent' in case of EDI shipping bills; and subclause (ii) of clause (b) thereof provides the procedure for 'declaration of intent' on any EDI shipping bills. Para 3.14 of the Handbook of Procedure, reads as under:
"3.14 Procedure for Declaration of Intent on EDI and Non EDI shipping bills for claiming rewards under MEIS including export of goods through courier or foreign post offices using eCommerce:
(a) (i) EDI Shipping Bills: Marking/ticking of "Y" (for Yes) in "Reward" column of shipping bills against each item, which is mandatory, would be sufficient to declare intent to claim rewards under the scheme. In case the exporter does not intend to claim the benefit of reward under Chapter 3 of FTP exporter shall tick "N' (for No). Such marking/ticking shall be required even for export shipments under any of the schemes of Chapter 4 (including drawback), Chapter 5 or Chapter 6 of FTP.
(ii) NonEDI Shipping Bills: In the case of nonEDI Shipping Bills, Export shipments 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.
(b) Whenever there is a decision during the financial year to include any new product/goods or new markets then to avail such rewards:
(i) For exports of such products/goods, to such markets, a grace period of one month from the date of notification/public notice will be allowed for making this declaration of intent.
(ii) After the grace period of one month, all exports (of such products/goods or to such markets) would have to include the declaration of intent on all categories of shipping bills.
(iii) For exports made prior to date of notification/ public notice of products/markets, such a declaration would not be required since such exports would have already taken place."
24. On a plain reading of the provisions of para 3.14 of the Handbook of Procedure to Foreign Trade Policy 201520, it is apparent that the 'declaration of intent', in the manner provided for EDI shipping bills, has been made mandatory, whereas in the case of NonEDI shipping bills, such 'declaration of intent' is not stated to be mandatory. The respondents, in their affidavit in reply, have stated that the instant case is of a SEZ unit which exported the goods under free shipping bills. All the SEZ exports come under free shipping bills. Therefore, the mandatory 'declaration of intent' with effect from 01.06.2015 will not be applicable in this case. Therefore, the unit has to declare its intent for claiming benefits under the MEIS for exports made prior to 01.06.2015, that is, for the period between 01.04.2015 to 31.05.2015. As per the Foreign Trade Policy/Handbook of Procedure 201520, MEIS benefits were available to SEZ units with effect from 01.04.2015. Page 19 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER
25. In case of EDI shipping bills, where it was mandatory to file the 'declaration of intent' in the manner provided in para 3.14 of the Handbook of Procedure to FTP (201520), vide Public Notice 40/20152020 dated 9th October,2015, it has been provided thus:
"2. As per para 3.14 of Hand Book of Procedure to FTP (201520), all exporters while filling export shipments under all categories of the shipping bills are required to declare the following intent to claim benefit under MEIS: "We intend to claim rewards under Merchandise Exports from India Scheme (MEIS)". Declaration of intent is mandatory with effect from June 1, 2015. CBEC has also issued a circular no. 14/2015 dated April 20, 2015, which requires mandatory declaration of intent from 1.6.2015 onwards. In EDI generated shipping bills, exporters are required to tick mark "Y" in case they intend to claim benefits under MEIS and "N" in case they do not intend to claim benefit under MEIS.
3. In light of these circumstances and to address the matter, in exercise of powers conferred under paragraph 1.03 of the Foreign Trade Policy (20152020) read with reference to para 3.14 of Handbook of Procedures of FTP 201520, the Director General of Foreign Trade hereby allows the following procedure to be followed where exports have been made between 1.4.2015 to 31.5.2015, and where the exporter has inadvertently marked "N" in the "reward item box" and wishes to seek MEIS benefits:
Exporters shall submit physical copies of free shipping bills after electronic filing Of application to RA at the time of submission of application for MEIS rewards in these cases. RA shall grant MEIS rewards after examination of such shipping bills in accordance with other provisions of FTP/HBP.
4. From 01.06.2015, only those shipping bills, which are transmitted by Custom Authorities to DGFT, shall be considered under MEIS.
Effect of this Public Notice:
Shipping bills, where declaration of intent 'Y' has not been marked and 'N' has been ticked inadvertently in the 'reward item box' while filing shipping bill in Customs for exports made between 1.4.2015 to 31.5.2015, shall be transmitted by CBEC to DGFT."
26. Vide Public Notice No.47/20152020 dated 08.12.2015, the procedure prescribed vide Public Notice No.40 dated 09.10.2015 has been extended beyond 31.05.2015 for the period from 01.06.2015 to 30.09.2015.
27. From the facts and contentions noted above, it emerges that the petitioner is not permitted conversion of the shipping bills from free shipping bills to MEIS shipping bills for the reason that Circular No.36/2010Customs dated 23.09.2010 Page 20 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER provides that conversion may be allowed provided that request has been made within three months from the date of the Let Export Order. The facts as recorded hereinabove reveal that the Deputy Commissioner of Customs, Kandla SEZ, Gandhidham (Office of the Development Commissioner, Kandla Special Economic Zone) has, in the context of the petitioner's request for amending the shipping bills to incorporate 'declaration of intent', has furnished comments on the issue to the respondent No.6 - Assistant Commissioner (Exports), Office of the Commissioner of Customs, Kandla, stating that the petitioner has been regularly filing its claim for similar goods under the MEIS for later periods and it appears that the petitioner is otherwise eligible for benefits under the said scheme. Therefore, in the light of the provisions of section 149 of the Act read with the provisions of Circular No.36/2010Customs dated 23.09.2010 and Notification No.40/2012( NT) dated 02.05.2012, the decision regarding conversion may be taken on the basis of documentary evidence which was in existence at the time when the goods were exported subject to the satisfaction of the competent authority.
28. Thus, the eligibility of the petitioner to claim benefits under the MEIS has not been doubted. The sole hurdle in the case of the petitioner is that since the shipping bills are free shipping bills, wherein no 'declaration of intent' has been made, the petitioner is required to get the shipping bills amended by incorporating the following 'declaration of intent':
"We intend to claim rewards under Merchandise Exports From India Scheme (MEIS)".
29. In this case, the petitioner applied for the MEIS for the exports made during the period April 2015 to January 2016, under separate applications. The said applications were partly allowed and twenty five shipping bills were disputed. Vide letter dated 03.08.2016, the petitioner was informed by the respondent No.5 - Development Commissioner, that since there is no 'declaration of intent' on the shipping bills for claiming benefits under the MEIS, a reference has been sent to the respondent No.3 DGFT for a clarification whether such shipping bills (NonEDI) prior to 01.06.2015 were eligible for benefits under the MEIS benefits or not. Therefore, till that time, its claim will be kept pending. Thus, the claim was kept pending by the concerned authorities.
30. Vide letter dated 06.06.2017, the petitioner requested the respondent No.4 - Commissioner of Customs, Kandla, to allow benefits under the MEIS on the shipping bills in case the 'declaration of intent' was not mentioned on exports made prior to 01.06.2015, whereupon the petitioner was advised/informed to comply with the amendment in the form of conversion of shipping bills from free to MEIS, whereafter, the petitioner applied for conversion of shipping bill. Page 21 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER
31. Subsequently, vide communication dated 18/19.07.2017, the petitioner was informed that the shipping bills are required to be amended by the competent authority under section 149 of the Act and was requested to approach the proper officer of Customs under section 149 of the Act, whereupon the petitioner, on 01.08.2017, requested the competent authority to amend the shipping bills under section 149 of the Act at the earliest.
32. Thus, the respondents had not informed the petitioner immediately to get the shipping bills converted into one under the MEIS. It was only after a lot of inter se communication, that the petitioner was advised to get the shipping bills amended and converted to MEIS shipping bills. Upon the petitioner making such application for amendment, after prolonged inter se communications between the respondents as to who had the jurisdiction to decide said application, the same came to be turned down on the ground that the application for amendment had been made beyond three months as stipulated in Circular 36/2010Customs dated 23rd September, 2010.
33. Circular 36/2010Customs dated 23rd September, 2010 provides for conversion of free shipping bills to Advance Authorisation/DEPB/Drawback shipping bills and from one export promotion scheme to another. Clause (a) of paragraph 3 thereof provides that the conversion may be allowed subject to the conditions laid down thereunder. Condition (a) thereof reads thus: "Request for conversion is made by the exporter within three months of the date of the Let Export Order (LEO)". From paragraph 4 of the circular, the reason for providing such time limit appears to be that free shipping bills (shipping bills not filed under any export promotion scheme) are subject to 'nil' examination norms.
34. In the facts of the present case, as noticed earlier, it is not the case of the respondents that the petitioner is not otherwise covered by Circular No.36/2010Customs dated 23.09.2010. The sole ground on which the application has been rejected is for non compliance of condition (a) of paragraph 3 of the said circular, namely that the application has been filed beyond a period of three months from the date of filing the Let Export Order.
35. At this juncture, it may be apposite to refer to the decision of the Delhi High Court in Kedia (Agencies) Pvt. Ltd. v. Commissioner of Customs, 2017 (348) ELT 634 (Del.), on which reliance has been placed by the learned advocate for the petitioner, wherein the question that arose for consideration was: "Did the CESTAT fall into error in upholding the denial of the petitioner's claim for amendment of its shipping document under section 149 of the Customs Act." The court held thus: Page 22 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER
"7. In the present case, the appellant had been consistently dealing with the same goods and exporting them previously for over three years. The precondition of a declaration along with the relative forms, for grant of benefit was introduced on 142008 through an amendment to the Handbook of Procedures. It is now settled law that the provisions of the Foreign Trade (Development & Regulation) Act, 1992, the rules or regulations framed thereunder and the export import policy have the force of law. Handbook of Procedures and the amendments carried out thereto are per se not declaration of law but only impose conditions which are to be fulfilled and otherwise conform to the requirements of law. Without making a deeper analysis of these legal provisions, the facts of this case reveal that the export goods are essentially agricultural produce and continued to be covered as an item eligible for benefit. At the time, just prior to 142008, the goods had been exported as free shipping bills. The exporter/appellant's fault here is that it did not file the requisite declaration. In all other respects, I.e. as to whether they conform to the description in the shipping documents and the value, etc. continues to be ascertainable because the concerned bills, invoices and other shipping documents are available with the customs authorities.
8. Having regard to these, we are of the opinion that in the peculiar circumstances of the case, the omission to file the declaration of the kind we are concerned with, when all other relative materials are present was not vital to the appellant's case. The material which did and does exist is substantial; the appellant should, therefore, be permitted to amend its shipping bill. The respondents are directed to give effect to this order within the next two months. The appeal is consequently allowed."
36. In the opinion of this court, the above decision would be squarely applicable to the facts of the present case. As is evident from the letter dated 07/08.09.2019 (AnnexureO to the petition), the Deputy Commissioner of Customs, Kandla SEZ, Gandhidham (Office of the Development Commissioner, Kandla Special Economic Zone) has, in the context of the petitioner's request for amendment in the shipping bills to incorporate 'declaration of intent', furnished comments for specific recommendations on the issue to respondent No.6 - Assistant Commissioner (Exports), Office of the Commissioner of Customs, Kandla, stating that the petitioner is filing regularly its claim for similar goods under MEIS for later periods and it appears that the petitioner is, otherwise, eligible for the said scheme. Therefore, in the light of the provisions of section 149 of the Act read with the provisions of Circular No.36/2010Customs dated 23.09.2010 and Notification No.40/2012( NT) dated 02.05.2012, the decision regarding conversion may be taken on the basis of documentary evidence which was in existence at the time when the goods were exported, subject to the satisfaction of the competent authority.
37. Thus, except for the fact that the request for conversion Page 23 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER of the free shipping bill to MEIS shipping bill has been made beyond the time prescribed in Circular No.36/2010Customs dated 23.09.2010, no other objection has been raised on behalf of the respondents. In the opinion of this court, having regard to the peculiar facts of the present case, the omission to file 'declaration of intent' when all other relevant material is available, is not fatal to the petitioner's case. As in the case of Kedia (Agencies) Pvt. Ltd. v. Commissioner of Customs (supra), in the facts of the present case also, in all other respects, that is, as to whether the goods conform to the description in the shipping documents and the value, etc. continues to be ascertainable because the concerned bills, invoices and other shipping documents are available with the customs authorities. The respondents are, therefore, not justified in turning down the request to convert the shipping bills of the petitioner from free to MEIS and thereby depriving the petitioner of the benefits under the MEIS in respect of exports made under such shipping bills.
38. In the light of the above discussion, the petition succeeds and is, accordingly, allowed. The impugned letter dated 11.02.2019 of the respondent No.2, Under Secretary, Government of India, is hereby quashed and set aside. The respondents are directed to permit the petitioner to convert the shipping bills in question from free shipping bills to MEIS shipping bills subject to the satisfaction of the competent authority. The respondents shall give effect to this order within two months from the date of receipt of copy of this order. Rule is made absolute accordingly, with no order as to costs."
12. The Court thus had recognised the fact that the eligibility of the petitioner to claim benefits under the MEIS scheme has not been questioned. The only hurdle was that the shipping bills were free shipping bills and there was no declaration of intent made. The petitioner needed to get the shipping bills amended by incorporating the declaration of intent as provided under the MEIS and it had taken aid of various circulars to allow that petition. Page 24 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER
13. In the instant case, as noted hereinabove, there is no doubt with regard to the exports having been made under the FTP 201520 where, initially, Sri Lanka was not one of the countries where such reward was available on export to the said country. The petitioner has already exported its product 'vitrified tiles' to Sri Lanka and 73 shipping bills have also been produced before the respondent authorities. What has been pleaded all through out by the petitioner is of lack of knowledge of subsequent public notices which had included Sri Lanka as a country for seeking the reward under the MEIS and entire procedure having been simplified, instead of getting the declaration produced for the purpose of the reward, the ticking of N/Y would suffice in case of the EDI. The ticking itself had been made equivalent to such declaration. It is quite clear that for the purpose of the reward, the EDI has been simplified more particularly, by way of the Public Notice No.9 of 2015 dated 16.05.2016 and the marking of tick in pursuance of the earlier Page 25 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER Public Notice No.47 dated 08.12.2015 had been treated as a declaration of intent in case of EDI shipping bills.
14. What we notice is that in case of Messrs Gokul Overseas (supra) even the conversion has been permitted by the Court, whereas in the instant case, it is only the question of the EDI bills where inadvertently instead of 'Yes' the ticking was on 'N'. As provided in case of Pasha International vs. Commissioner of Customs (supra) by Madras High Court, this has to be construed as pure and simple mistake on the part of the exporter, when otherwise the respondent has not questioned any of the shipping bills and it is only because the declaration of intent on the said shipping bills for claiming the benefits under the MEIS, the subsequent claim made by him on the EDI is questioned on the ground that Section 149 of the Customs Act would not be applicable.
15. We are of the opinion that the decisions which have been discussed hereinabove coupled Page 26 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER with the very object of the MEIS would not allow us to endorse to the stand taken by the respondent authority, even if, the subsequent notices, which have been relied upon for denying the benefits by virtue of the communication dated 10.06.2019 do not prescribe the time limit, the reasonable time could be regarded as this request is made at the end of one year.
16. We also agree with the submissions made by the learned advocate for the petitioner that Section 149 of the Customs Act, 1962 which has been taken recourse to by the petitioner does not prescribe any time limit. It is a discretion of the concerned officer, which can authorize any document after it has been presented in the Custom House to be amended. Of course, this has not to be amended after once the imported goods have been cleared for the home consumption and deposited in the warehouse where export goods have been exported, except on the basis of the documentary evidences, which are in existence at Page 27 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER the time of the clearance, deposit or the export of the goods, as the case may be. In the electronic age, all procedures have been simplified and the EDI is essentially keeping pace with the electronic age. The simplification of this process shall have to be viewed for the benefit of the exporters for whose benefit the scheme has been brought by the Centre as availment of benefits is in no manner going to have any bearing adversely on the exchequer; And, even otherwise, it is essentially to avail the exporter the benefits prescribed under the MEIS that the request has been sent by the petitioner to make the same available to it. Therefore, it is also expected of the respondent authority to adopt an approach, giving progressive interpretation to all these provisions and the policy decisions rather than having conventional outlook.
17. We also cannot overlook a noticeable fact in this communication where there is a specific reference of the decision of the High Court of Madras and the approach which has been adopted by the authority. It has chosen to state that, it is mandamus in nature and case specific, without Page 28 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022 C/SCA/17804/2019 ORDER realising that the decision shall have to be applied to the facts of every case by reading the ratio and once the facts are similar, application of ratio is the discipline expected of all concerned.
18. Resultantly, this petition is allowed. The impugned communication dated 10.06.2019 is quashed and set aside. Respondent No.2 is directed to issue No Objection Certificate to the petitioner for availing the benefits as provided under the policy.
19. Let the said exercise be completed within a period of eight weeks from the date of receipt of a copy of this order.
Sd/-
(MS SONIA GOKANI, J) Sd/-
(MS SANGEETA K. VISHEN,J) M.M.MIRZA Page 29 of 29 Downloaded on : Wed Jan 12 07:30:42 IST 2022