Conversion of Shipping Bill to DEPB is the Prerogative of Customs and DGFT Direction on this has No Effect
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
Appeal No.C/144 to 146/2009
Arising out of: OIO No.10/Commr/2008-09, dt.28.01.2009
OIO No.11/Commr/2008-09, dt.28.01.2009
OIO No.12/Commr/2008-09, dt.28.01.2009
Passed by: Commissioner of Customs (Prev), Jamnagar
For approval and signature:
Mr. M.V. Ravindran, Honble Member (Judicial)
Mr. B.S.V. Murthy, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
4. Whether order is to be circulated to the Departmental Yes
M/s Global Food Exports, M/s Cham Ice & Cold Storage, M/s Cham Trading Organisation.
CC (Prev.), Jamnagar
Shri P.P. Jadeja, Consultant: for Assessee.
Shri R. Nagar, A.R.: for the Revenue.
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL)
MR. B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL)
Date of Hearing/Decision:21.03.12
ORDER No. A/375-377/2012-WZB/AHD/2012, dt.21.03.12
Per: MR. B.S.V. Murthy:
The brief facts of the case are as under:-
M/s Global Food Exports are exporter of processed/frozen fish and fish products. They had exported the product under various shipping bills during the period April 1997 and May 1997 and DEPB scheme came into operation w.e.f. 1.4.1997. At the time of export of the goods, the appellant had not declared their intention to claim DEPB benefit and in their application and after issue of CBEC Circular No.6/2003-Cus, dt.28.01.2003, they applied for conversion of shipping bills to DEPB shipping bills, so that they can get the benefit of DEPB scheme. This application was rejected by the Assistant Commissioner (Customs Division) Porbandar, relying upon the CBEC Circular No.4/2004-Cus, dt.16.1.2004. According to this circular, request for conversion of free shipping bills to DEPB shipping bills was not permitted. The applications had been filed on 26.12.2003 and rejection was communicated on 18.5.2006. The appellants approached Hon'ble High Court of Gujarat against rejection of their request and Hon'ble High Court directed Commissioner of Customs, Jamnagar, not to deny the benefit of conversion of free shipping bills on the basis of Circular dt.16.01.2004 and pass a fresh order on merit in accordance with the law. After receipt of this direction from Hon'ble High Court, the Commissioner has passed the impugned order, once again rejecting the request of the appellant for conversion of free shipping bills into DEPB shipping bills.
2. Ld.Consultant on behalf of the appellant submitted that the request of the appellant for conversion of shipping bills has been rejected without taking into account the Policy Circular No.44(RE-2010)/2009/14, dt.1.11.2011. He submits that according to this circular, the free shipping bills in respect of which the application for conversion was made between 28.01.2003 and 15.01.2004 and conversion was allowed, DEPB credit would be granted. He submits that this circular would mean that if the application has been made between 28.01.2003 and 15.01.2004, the appellants are eligible for conversion and therefore the Commissioner has erred in not allowing the conversion. He submits that in this case, there is a report of Superintendent of Customs, Porbandar, stating that the exports have taken place and inputs have been used in the manufacture and therefore DEPB benefit should not have been denied on the technical ground that certain procedural requirements had not been followed.
3. Ld.A.R. submits that the rejection has been made correctly since the appellant has failed to follow the requirements of Public notice and they also failed to furnish declaration which was required to be filed with shipping bills for claiming DEPB and such requirement was known to the appellant even before filing the shipping bills. Since the appellant failed to file the required declaration which would have enabled the authorities to know the inputs used and the eligibility or otherwise for DEPB benefit, the impugned order rejecting the conversion, is legal and proper. Further, he also submitted that the requirements in a Public notice, which have not been fulfilled are substantive ones viz. the export could not have taken place from Porbandar prior to 24.2.97 since Porbandar was not a notified Port for the purpose of export under DEPB scheme; and the shipping bills were required to be counter-signed by Assistant Commissioner of Customs, whereas in this case, it was the Superintendent, who had signed the shipping bills. The requirement of counter-signature by the Assistant Commissioner of Customs would show that the Department required the scrutiny/assessment of the shipping bills at a higher level, in the cases where DEPB benefits were claimed.
4. We have considered the submissions made by both sides. As regards Policy Circular dt.1.11.2011, the circular only directs the regional authorities to decide the admissibility of DEPB benefit in cases where the Commissioner of Customs has already allowed the conversion of free shipping bills to DEPB shipping bills. Apparently, this circular has been issued to the Regional Authorities in view of the fact that in several cases, even after conversion was allowed by Customs authorities, the Regional Authorities of DGFT have rejected grant of these benefits. In this case, the conversion was never allowed by Customs authorities and therefore the Policy circular issued by DGFT is of no help to the appellant. In any case, it cannot be said that DGFT can direct the Customs authorities to convert shipping bills.
5. Coming to other submissions, we find that as rightly submitted by ld.A.R., in case of shipping bills filed prior to 22.4.97, DEPB benefits could not have been allowed at all since Porbandar was not a port specified for export under DEPB shipping bills. Ld.Consultant submitted that the notification issued on 22.4.97 including Porbandar, has to be considered as one having retrospective effect. In view of the different requirements for assessment these shipping bills and other shipping bills, which we can see from the subsequent discussion in this order, it cannot be said that the declaration of Porbandar as a port for DEPB shipping bills, can have retrospective effect. Neither the officers nor the exporters would be knowing all these requirements, if Porbandar itself was not a specified port. Therefore, rejection of request for conversion on the ground that the Porbandar port was not a declared port, has to be upheld.
6. As regards remaining shipping bills, the ld.Commissioner has clearly indicated that the Commissioner of Customs, in terms of proviso to condition (iv) of the Notification No.34/1997-Cus, had issued a Customs Public Notice No.17/1997-CCP, dt.21/22.4.97. According to this Public notice, export under DEPB scheme is allowed subject to the following conditions:-
(i) The shipping bills are assessed by an officer not below the rank of Assistant Commissioner.
(ii) Debit of the DEPB is made by the Assistant Commissioner of Customs.
(iii) This condition relates to export consignment of synthetic textile. (Hence, not reproduced.)
(iv) Consignment will be subject to test weight of container/packages on selective basis.
(v) Shipping bills should be submitted at least 3 days in advance of shipment at the port of clearance, excluding holidays.
7. After going through the records, the Commissioner has observed that the appellant has not fulfilled the conditions No.(i), (iv) and (v). In this case, none of the shipping bills were assessed by the Assistant Commissioner and the shipping bills were not filed 3 days in advance also. Further, the Commissioner has also observed that according to CBEC Circular No.10/1997-Cus, dt.17.4.97, the shipping bills for export made under DEPB scheme should bear Blue Colour Stripat the top and should indicate the serial number of the export product in the Public notice issued by DGFT specifying the rate of entitlement and the rate claimed. He says that these are all substantive conditions for claiming benefit of DEPB scheme and therefore if these are not fulfilled, conversion cannot be allowed. We find ourselves in agreement with the Commissioners views. Further, we also find that the Commissioner has discussed each and every aspect relevant to conversion of shipping bills and submissions of the appellant and considered the issue in detail.
8. Therefore, we do not find any merits in the appeals filed by the appellants against the impugned orders and accordingly reject the same.
(Operative portion of the order pronounced in Court)
(M.V. Ravindran) (B.S.V. Murthy)
Member (Judicial) Member (Technical)