22 September, 2011

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MECHELONIC ENGINEERS PVT. LTD. Versus COMMR. OF CUS. (EP), MUMBAI

Conversion of 'drawback shipping bill' to 'DEEC shipping bill - Board's Circular No. 4/2004-Cus., dated 16-1-2004 - No speaking order - The Circular No. 4/2004-Cus. which permitted conversion of shipping bill from one export promotion scheme to another, subject to specific conditions, superseded all previous circulars on the subject. In that process, obviously, the parent circular for the public notice also came to be superseded - Appeal is allowed by way of remand to AO




No. - C/1259/2006
Order No. - A/80/2011-WZB/C-I(CSTB)
Dated - February 17, 2011
 
S/Shri P.G. Chacko, Sahab Singh, JJ.
REPRESENTED BY : Shri J. Arthur Prem, Consultant, for the Appellant.
Shri B.P. Pereira, JDR, for the Respondent.
[Order per : P.G. Chacko, Member (J)]. -

In this appeal filed by the party, we are concerned with the question whether the application made by them for conversion of ‘drawback shipping bill’ to ‘DEEC shipping bill’ was liable to be allowed by the respondent-Commissioner.

2. On a perusal of the records and on hearing both sides, we note that the appellant had filed a shipping bill on 22-9-2000 under claim for drawback against export of a welding machine for containers. Earlier, they had applied to the DGFT on 8-7-2000 for advance licence, after obtaining a proforma invoice from abroad and opening a Letter of Credit. The advance licence was issued on 25-7-2000 and the same was received by the appellant on 13-9-2000. However, the appellant chose to file shipping bill dated 22-9-2000 under claim for drawback rather than under DEEC scheme. Today, it is sought to be explained that there was some communication gap between the appellant and their CHA and that is why the shipping bill could not be filed on 22-9-2000 under DEEC scheme.

3. In the circumstances of the case, we think, we need not proceed further discussing this aspect. Suffice it to say that the appellant received a letter dated 20-1-2004 from the Assistant Commissioner of Customs (Gr. VII) (Export), which stated that their request for conversion of shipping bill stood rejected as per Board’s Circular No. 4/2004-Cus., dated 16-1-2004. The Assistant Commissioner’s order also stated that, as per the Board’s circular, conversion of shipping bill from one export promotion scheme to another could be allowed only in cases where the benefit of the first scheme had been denied by the DGFT or the customs authorities due to any dispute. It was also pointed out by the Assistant Commissioner that, as per the Board’s circular, the request for conversion of shipping bill should be made within one month of the denial/rejection by DGFT/Customs. After receipt of the Assistant Commissioner’s letter, the appellant entered into correspondence with the office of the Commissioner of Customs (EP). They received another letter dated 20-9-2005 from the Assistant Commissioner of Customs (EP), wherein it was stated that conversion of the shipping bill, at that stage, was not possible as the goods had already been shipped and further that the case was not a fit case for such conversion. It appears, subsequently, the appellant received yet another letter from the Assistant Commissioner of Customs, dated 19-12-2005 .wherein they were required to produce certain documents. The appellant is said to have produced these documents and awaited for the outcome. Having found no response, they sent a reminder to the Commissioner of Customs (EP) on 9-1-2006, which was received by the addressee on 10-1-2006. In this letter, the appellant furnished the list of documents required by the Assistant Commissioner. They also renewed their request for conversion of the shipping bill. Apparently, in response to this request, the Commissioner of Customs (EP) held a personal hearing on 23-8-2006 and issued a letter dated 25-8-2006 intimating that the request for conversion of shipping bill had already been considered and rejected and that the decision could not be reviewed or reconsidered. The present appeal is directed against this communication received by the appellant from the Commissioner.

4. Learned consultant for the appellant submits that the application for conversion of shipping bill from drawback scheme to DEEC scheme was made in terms of Public Notice No. 17/90, dated 1-3-1990 issued by the Collector of Customs, Bombay. It is submitted that the said public notice had laid down the circumstances in which conversion of shipping bill from one export promotion scheme to another could be permitted. It is submitted that, accordingly, the appellant was entitled to seek such conversion on the ground of lack of communication between them and their CHA. The learned consultant further points out that the said public notice was relied on by the appellant in one of their correspondence with the Commissioner of Customs viz : letter dated 14-10-2003 (copy available on record), but the learned Commissioner never considered the said public notice. On the other hand, the request for conversion of shipping bill was rejected in terms of Circular No. 4/2004, dated 16-1-2004. It is submitted that this circular did not have retrospective effect and hence not applicable to the above request for conversion of shipping bill. The learned consultant, therefore, prays for a direction to the Commissioner to reconsider the said request in terms of the Public Notice No. 17/1990.

5. The learned JDR has opposed the above arguments. He submits that the appeal itself cannot be said to be maintainable inasmuch as the letter dated 20-1-1994 of the Assistant Commissioner of Customs communicating the Commissioner’s decision to the appellant was not appealed against. What was contained in the letter dated 25-8-2006 was only a reminder of the above decision of the Commissioner. The JDR, significantly, points out that the Assistant Commissioner’s letter dated 20-1-2004 clearly stated the reason why the Commissioner had rejected the appellant’s request for conversion of shipping bill. According to the JDR, the Assistant Commissioner’s letter dated 20-1-2004 was very much appealable. In the absence of such appeal, the present appeal filed against the Commissioner’s letter dated 25-8-2006 will not be maintainable. This apart, the learned DR has also vehemently argued that the Circular No. 4/2004 dated 16-1-2004 superseded all previous Circulars on the subject and, therefore, Public Notice No. 17/1990 issued by the Collector of Customs, Bombay also should be considered to have been superseded by Circular No. 4/2004. According to the DR, the request for conversion of shipping bill was rightly rejected on valid ground referable to Circular No. 4/2004.

6. After considering the submissions, we have found a fit case for remand in the circumstances of this case. The argument of the JDR that this appeal cannot be maintained against the Commissioner’s letter dated 25-8-2006 is specious, but not acceptable inasmuch as the said letter was issued after hearing the party on 23-8-2006 on the merits of their application for conversion of shipping bill. This aspect is manifest on the face of the said letter of the Commissioner. The Commissioner’s letter intimating rejection of the appellant’s request for conversion of shipping bill and also intimating lack of authority for review, having been issued after personal hearing, would certainly qualify to be an appealable order passed by the Commissioner in exercise of quasi-judicial power. This appeal is, therefore, maintainable.

7. It is not in dispute that, the appellant claimed conversion of shipping bill under Public Notice No. 17/1990 which laid down the factual situation in which such conversion could be permitted as well as the situations in which the benefit could not be allowed. The Circular No. 4/2004-Cus. which permitted conversion of shipping bill from one export promotion scheme to another, subject to specific conditions, superseded all previous circulars on the subject. In that process, obviously, the parent circular for the public notice also came to be superseded. The learned consultant has argued that supercession of the public notice did not have retrospective effect and the learned DR has argued to the contra. We are of the view that this aspect must be agitated before the Commissioner. Let the learned Commissioner consider the pros and cons of the whole matter and take a fresh decision on the appellant’s application for conversion of shipping bill on merits, after giving them a reasonable opportunity of being heard. We would request the Commissioner to pass a speaking order as early as possible in the circumstances of this case, at any rate, within a period of three months from the date of receipt of a certified copy of this order.

8. In the result, the impugned proceedings are set aside and this appeal is allowed by way of remand.
(Dictated in Court)

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