Custom, Excise & Service Tax Tribunal
Hindusthan Urban Infrastructure ... vs Visakhapatnam G S T on 3 January, 2022
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS EXCISE & SERVICE TAX APPLELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH
CUSTOMS APPEAL NO. 30577 OF 2021
(Arising out of Order-in-Appeal No. VIZ-CUSTM-000-APP-056-17-18 dated
24.01.2018 passed by the Commissioner(Appeals)Guntur, Central Tax, & Customs,
Visakhapatnam)
M/s Hindustan Urban Infrastructure Limited Appellant
7th Floor, Kanchenjunga,
18, Barakhamba Road,
New Delhi-110001
VERUS
The Principal Commissioner of Customs Respondent
Customs House, Port Area, Visakhapatnam-530035 Appearance Shri Amit Jain, Advocate for the Appellant Shri V R Pavan Kumar, Authorised Representative of the Department CORAM: MR. JUSTICE DILIP GUPTA, PRESIDENT MR. P V SUBBA RAO, MEMBER (TECHNICAL) Date of Hearing : 15/12/2021 Date of Decision: 03/01/2022 FINAL ORDER NO. A/30001 /2022 PER: P V SUBBA RAO:
This appeal is filed by the appellant assailing the Order in Appeal 1 dated 24 January 2018 rejecting the appellant‟s appeal against Order in Original dated 18 May 2017 passed by the Additional Commissioner of Customs.
2. The facts of the case are that the appellant filed 15 Shipping Bills for export of goods through the Customs Electronic Data Interchange 2. On the face of each these EDI Shipping Bills, it has been indicated "WE
1. Impugned order
2. EDI 2 C/30577/2021 intend to claim rewards under Merchandise Exports Incentive Scheme3 (MEIS)", but in the column in the Shipping Bill "SCHEME REWARD"
asking whether they were claiming the benefit of any export incentive, the appellant marked „NO‟ instead of „Yes‟. It also appears that NO is the default entry in the system, i.e., if the exporter does not enter YES, the system takes it as NO. As per the MEIS, the Director General of Foreign Trade4 provides the incentive for exports under the Shipping Bills claiming benefit under the scheme which are transmitted electronically by the Customs. Since the appellant mentioned NO, the shipping bills were not transmitted and it had not received the incentive.
3. Much later, on 9.10.2016, the appellant submitted to the Customs a request to amend the Shipping Bills under Section 149 of the Customs Act changing the entry from NO to YES. It was the appellant‟s contention before the lower authorities as well as before us that their intent to avail the benefit of MEIS was evident in black and white on the face of every shipping bill, and therefore, it should not be denied the benefit simply because of the error in an entry.
4. Section 149 of the Customs Act reads as follows:
"Section 149. Amendment of documents. -
Save as otherwise provided in sections 30 and 41, the proper officer may, in his discretion, authorise any document, after it has been presented in the custom house to be amended 5 [in such form and manner, within such time, subject to such restrictions and conditions, as may be prescribed]:
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
3. MEIS
4. DGFT
5. Inserted (w.e.f. 1-8-2019) s. 80 of the Finance (No.2) Act, 2019 (23 of 2019).3
C/30577/2021 was in existence at the time the goods were cleared, deposited or exported, as the case may be.
6[Provided further that such authorisation or amendment may also be done electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria:"
Provided also that such amendments, as may be specified by the Board, may be done by the importer or exporter on the common portal.]"
5. From 1 August, 2019, the provision to prescribe form, manner and restrictions and conditions in permitting the amendments was also introduced in the section. The second and third provisos to the Section were specifically introduced with effect from 28 March 2021 allowing the amendments to be done electronically and also allowing the importer or exporter itself to make the amendments in the common portal.
6. As per Section 149, the proper officer may, in his discretion, allow amendments in the Shipping Bill subject to the condition that after the export was completed, the amendments can be authorised only on the basis of the documents available at the time of export. In this case, the Additional Commissioner rejected the request for amendment on the ground that the Export General Manifest 7 in the case was already closed and therefore, no amendment is possible and this decision was upheld by the Commissioner (Appeals) in the impugned order. The appellant therefore, filed this appeal on the following grounds:
(i) The impugned order has been passed ignoring the provisions of Section 149 and placing reliance on provisions of Hand Book of Procedures and public notices issued by DGFT which is unsustainable in law;
6. Inserted (w.e.f. 28-03-2021) s. 98 of Finance Act 2021 (13 of 2021).
7. EGM 4 C/30577/2021
(ii) The impugned order is based on an incorrect appreciation of the provisions of the foreign trade also and Hand Book or Procedures;
(iii) The substantive benefits should not be denied on account of the procedural lapses;
(iv) The amendment in the shipping bills and consequent the benefit of MEIS should not be denied to the appellant due to cross fire between two departments of the Central Government.
7. The prayer made in the appeal is as follows:
(i) Set aside the impugned order and allow in full;
(ii) Direct the authorities to allow amendment of 19 shipping bills in question to mark YES in place of NO in the column meant for "Scheme Reward" the shipping bills and thereafter transmit the data pertaining to the exports made by the appellant under these 19 shipping bills thereafter the customs EDI system to the DGFT;
(iii) Grant a personal hearing; and
(iv) Pass such other order as may be deemed fit and proper in the circumstances.
8. Learned Counsel relied on the following case laws:
(i) Man Industries (India) Ltd. vs CC(EP), Mumbai 8,
(ii) Parayil Food Products Pvt. Ltd. UoI,9
(iii) Vision Distribution P. Ltd. vs. CSGST10
(iv) Vidyut Majdoor Kalyan Samiti vs. State of Uttar Pradesh 11
(v) CC, Cochin vs. Mangalath Cashew,12
(vi) CC, Cochin vs. N.C John and Sons Pvt. Ltd. 13
8. 2006 (202) ELT 433 (Tri.-Mumbai)
9. 2021 (375)ELT 486(Ker.)
10. 2020 (34) GSTL 90 (Del.) 11 . 2021 (49) GSTL 230 (ALL.) 12 . 2020 (373) ELT 149(Ker.) 5 C/30577/2021
(vii) P.A. Footwear Pvt. Ltd. vs. DGFT, New Delhi14
(viii) Davinci Leather Pvt Ltd. vs. CC, Chennai15
(ix) K I International Ltd. vs CC, Chennai-IV16
(x) Bombardier Transportation India Pvt Ltd. vs DGFT 17
(xi) Portescap India Pvt. Ltd. vs UoI18
(xii) Indian Metals and Ferro Alloys Ltd. vs DGFT,19
9. The learned Departmental representative opposed the appeal on the following grounds:
(i) The application by the appellant requesting for amendment of EDI shipping bill was made on 19.10.2016 after a delay of 9 to 12 months from date of filing of shipping bills;
(ii) Declaration by the exporter in the form of YES or NO in the shipping bills is mandated by DGFT based on Hand Book of Procedures (HBS) para 3.14;
(iii) The amendment as requested could not be carried out as all the EGMs have already been closed against and it is not possible to carry out the amendment. Accordingly, the request was rejected by the Commissioner (Appeals).
Further as per para 3.01(g) in the Hand Book of Procedure to the Foreign Trade Policy 2015 to 2020 manual feeding to EDI shipping bills is not permitted;
(iv) In the case of Terra Films Pvt Ltd. 20 the High Court of Delhi has held that from plain reading of Section 149, it may be seen that exporter could not claim amendment in routine and as the matter of right. The discretion 13 . 2020 (374) ELT 465 (Ker.) 14 . 2020 (372) ELT 660 (Mad.) 15 . 2020 (372) ELT 367 (Mad.) 16 . 2021-TIOL-1384-HC-MAD-CUS 17 . 2021-TIOL-478-HC-AHM-CUS 18 . 2021 (376) ELT 161 (BOM) 19 . 2021-TIOL-1871-HC-ORISSA-CUS
20. 2011 268 (ELT) 443 (Del.) 6 C/30577/2021 vested in the proper officer to permit amendment in any document after the same has been presented in the customs house. Though this discretion was to be exercised judicially, but it was qualified with the proviso that the amendment could be allowed only if it was passed on the documentary evident in existence at the time of export of the goods. The Commissioner had, in the remand case (the case before the High Court) rightly observed that the request of conversion of shipping bills from one export promotion scheme into another was not merely of an amendment to the shipping bill. This request was made for conversion from one scheme to another after a lapse of long period of more than one year. It is the assertion of the learned Departmental Representative that in this case also the application for the amendment from NO to YES was made after a long period of 9 to 12 months from the date of shipping bills. He also pointed out the fact that all the shipping bills were cleared without physical examination. It is his assertion that the shipping bills get picked up for examination or otherwise by the risk management system of the Customs EDI depending upon the benefits claimed. In this case as the appellant declared that no benefit was being claimed that, the shipping bills were not picked up for examination. It is for this reason the shipping bills were also not transmitted online to the DGFT. Therefore, his submission is that this case is similar to this case of Terra Films Pvt. Ltd as the 7 C/30577/2021 appellant is seeking to convert a shipping bill with no claim of MEIS into one with a claim of MEIS;
(v) In the Case of Anil Sharma vs. Union of India21 High Court of Gujarat has held against the appellant relying on the judgment of the High Court of Delhi in the case of Terra Films (supra) which was also followed by the High Court Madras in the case of Suzlon Energy Ltd; and
(vi) He further submits that in the case of Commissioner of Customs (Export) vs. E.S Lighting Technology P Ltd. 22 the High Court has held that merely because no time limit is prescribed under Section 149 for the purpose of seeking amendment/conversion, it does not follow that a request in that regard could be made after passage of any length of time. The same could be made within a reasonable period. The conversion sought by the respondent was from free shipping bill to advance license shipping bill. The petitioner could not have entertained the application for such conversion without examination of the records. It was not fair to expect the Department to maintain, and be possessed of, the records after passage of five long years when the respondent made its application for such conversion. It is the assertion of the learned Departmental Representative that even in this case, the request for amendment was made after a delay of 9 to 12 months and therefore and will have the consequence of converting a free Shipping Bill to one in
21. 2017 (350) ELT 332(Guj)
22. 2020 (371) ELT 369 (Del.) 8 C/30577/2021 which the MEIS benefit is claimed and therefore, the request for conversion was correctly rejected by the lower authorities.
10. We have considered the arguments on both sides and perused the records.
11. The undisputed facts of the case are that the appellant filed 15 shipping bills and had mentioned „NO‟ instead of ‟YES‟ against the column to indicate if they wish to claim any benefit under the scheme. However, on the face of the Shipping Bills, it was categorically mentioned that it would claim the benefit of MEIS scheme. Now, the appellant wants the Shipping Bills to be amended so that the Shipping Bills say YES instead of NO against the column. Consequently, they want to get the benefit of the MEIS scheme.
12. The original authority has declined to amend the shipping bills because the EGM has already been closed and it is not possible to amend the shipping bill thereafter in the EDI system.
13. The submission of the learned counsel for the appellant is that they have a right to request for an amendment of the Shipping Bills under Section 149 of the Customs Act and such a request was denied only on the ground that the EGM was closed but this cannot be a ground to deny amendment under section 149.
14. Learned departmental representative, on the other hand, submits that the officer, may, in his discretion, permit amendment the amendment of Shipping Bills and he has exercised his discretion to not permit the amendment. He also emphasized that the Shipping Bills were all cleared without physical examination because the appellant 9 C/30577/2021 indicated that no benefits were being claimed. According to him, the appellant has no right to get the shipping bills amended.
15. We find Section 149 states the officer „may, in his discretion, permit‟ amendments and it does not say the officer shall permit amendment. If the legislative intent was to make amendment a vested right, then there was no need for permission from anyone. Not only is the word used is „May‟ and not „Shall‟, but it is followed by the words „in his discretion‟. The only limitation on the discretion of the officer is the proviso which states that it shall not be permitted except on the basis of the documentary evidence before the export. Subject to this limitation, the officer, indeed, has the discretion which he can exercise and permit or not permit amendments to the shipping bill. The exporter or importer has, as a corollary, the right to seek an amendment under section 149 but nothing in the section suggests that the importer or exporter has a right to an amendment. Otherwise, the words „the officer may, in his discretion‟ in Section 149 will be otiose. Needless to say that once an officer makes a decision, such a decision will be subject to judicial review.
16. The question which arises is when discretion is given to an administrative or quasi-judicial authority, can he decide in any manner he pleases or is it subject to any restrictions. This question has been dealt with in this Tribunal‟s Order in Jubilant Ingrevia Limited 23 , paragraph 28 of which is reproduced below:
"28. A Constitution Bench of the Supreme Court in Shri Sitaram Sugar Mills Ltd 24 observed that any arbitrary action, whether in the nature of legislative or administrative or quasi-judicial exercise of power, is liable
23. ANTI-DUMPING APPEAL No. 50461 OF 2021
24. (1990) 3 SCC 223 10 C/30577/2021 to attract the prohibition of article 14 of the Constitution. The relevant portion of the judgment is reproduced below:
"46. Any arbitrary action, whether in the nature of a legislative or administrative or quasi-judicial exercise of power, is liable to attract the prohibition of Article 14 of the Constitution. As stated in E.P. Royappa v. State of Tamil Nadu & Anr., [1974] 2 SCR 348, "equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch."
Unguided and unrestricted power is affected by the vice of discrimination: Mrs. Maneka Gandhi v. Union of India & Anr., [1978] 1 SCC 248 at 293-294. The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive, or quasi- judicial: Ramana Dayaram 'Shetty v. The International Airport Authority of India & Ors., [1979] 3 SCR 1014 at 1042; Ajay Hasia & Ors. v. Khalid Mujib Sehravardi & Ors.. [1981] 1 SCC 722 and D.S. Nakara & Ors. v. Union of India
47. Power delegated by statute is limited by its terms and subordinate to its objects. The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts. All his decisions, whether characterised as legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws of the land. They must be "reasonably related to the purposes of the enabling legislation". See Leila Mourning v. Family Publications Service. If they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end or do not tend in some degree to the accomplishment of the objects of delegation, courts might well say, "Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires". per Lord Russel of Killowen, C.J. in Kruse v. Johnson.
51. A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. See Associated Provincial Picture Houses Ltd. v. Wednes-bury Corporation, [1948] 1 K.B. 223. In the words of Lord Macnaghten in Westminster Corporation v. London and North Western ' Railway25,:
" ..... It is well settled that a public body invested with statutory powers such as those conferred upon the Corporation must take care not to exceed or abuse its powers. It must keep within the limits of the authority commit- ted to it. It must act in good faith. And it must act reasonably. The last proposition is involved in the second, if not in the first.....".
In The Barium Chemicals Ltd. & Anr. v. The Company Law Board & Ors., [1966] Supp. SCR 311, this Court states:
" ..... Even if (the statutory order) is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the Authority has to act in
25. 1905 AC 426, 430: 93 LT 143 11 C/30577/2021 accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts"..
In Renusagar26, [1988] 4 SCC 59, 104, Mukharji, J., as he then was, states:
"The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. Similarly, if the power has been exercised on a non-
consideration or non-application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated".
52. The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it"
(emphasis supplied)
17. From a perusal of both the order in original and the impugned order, it is evident that the officers exercised discretion to NOT permit amendments for any reason other than the fact that the EGM was closed and therefore, the amendment cannot be done in the Customs EDI system. The other reasons argued by the learned Departmental Representative such as the Shipping Bill was subjected to less rigorous examination because it indicated that no benefits were being claimed in the column and that this amounts to changing the nature of the scheme under which the goods are exported are not mentioned in
26. (1988) 4 SCC 59: AIR 1988 SC 1737 12 C/30577/2021 either the order-in-original or in the impugned order. Hence, these reasons cannot be accepted while deciding this appeal.
18. The next question is whether the reason given for not permitting amendment of the Shipping Bill can be sustained. Learned Counsel submits that the software should have been designed so as to enable the amendment of the Shipping Bill even after the EGM has been closed so that the appellant‟s request for amendment under Section 149 could be considered.
19. We agree with the learned counsel inasmuch as the software should not make the amendment under section 149 impossible if such as amendment is legally permissible. Equally true is that section 149 does not confer any right on the importer or exporter to get the Customs EDI software modified or altered. Therefore, if the software does not permit the amendment of the Shipping Bill in the system, it is unreasonable to ask the officer to do the impossible by amending it in the system. Instead, the amendments can be permitted manually. In the facts and circumstances of this case, we find that the appellant has made out a strong case for getting the Shipping Bills amended because its intention to claim the benefit was evident on the face of each Shipping Bill. Only an entry was made NO instead of marking YES and this should not deprive the appellant of its substantive benefit. The reason for not allowing the amendment is that the EGM was closed which may be valid reason for not being able to make the amendment in the EDI system, but is not a valid reason for not allowing amendment under Section 149.
20. Another prayer of the appellant is that the Customs officers should be directed to transmit the Shipping Bills to the DGFT. We find 13 C/30577/2021 that the request before the original authority and the appeal before the Commissioner (Appeals) were only with respect to permitting amendments in the Shipping Bills. This issue has also not been urged at the time of hearing of this appeal and is, therefore, not being decided.
21. Considering the facts and circumstances of the case, we set aside the impugned and partly allow the appeal by only directing the Respondents to permit amendment of the shipping bills either in the Customs EDI system or manually, as may be feasible.
22. The appeal is, therefore, partly allowed and the impugned order is set aside. The Respondents are directed to amend the fifteen shipping bills filed by the appellant by changing the column from NO to YES either electronically or manually, as may be feasible.
(Order pronounced on 03.01.2022) (JUSTICE DILIP GUPTA) PRESIDENT (P V SUBBA RAO) MEMBER (TECHNICAL) Tejo