CESTAT rejects Request of Indian Oil Corporation for Conversion of DEEC Shipping Bills to Drawback Shipping Bills since barred by limitation

The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) rejected the request of the Indian Oil Corporation for the conversion of DEEC shipping bills to drawback shipping bills since it was barred by limitation.

The appellant challenged the order of the Commissioner Custom, Air Cargo Export dated 18.6.2012 whereby the request for conversion of DEEC Shipping Bills to Drawback Scheme was rejected. 

IOC is registered with the Central Excise Department as Export Warehouse for the supply of Excise Bonded Aviation Turbine Fuel (ATF) to aircraft on the foreign-run and filed DEEC Shipping Bills with effect from 16.07.2010 against Advance Authorization / Licence obtained by them from DGFT as per Foreign Trade Policy 2009 – 2011.

That IOC made an application dated 22.08.2011 under Section 149 of the Customs Act, 1962 requesting for conversion of the DEEC shipping bills to drawback shipping bills on the ground that due to the abolition of customs duty on crude oil with effect from 25.06.2011, they could not avail duty-free import benefit of ATF exported by them during the period October 2010 to August 2011.

The request of IOC in terms of the aforesaid applications for conversion of DEEC shipping bills to drawback shipping bills to avail duty drawback was examined in terms of the provisions of section 149 of the Customs Act read with the CBEC's Circular No. 36 / 2010-Cus dated 23.09.2010, however the same were found to be time-barred and were accordingly rejected vide order dated 15.02.2012.

 It was contended by the petitioner that the application for conversion of shipping bills cannot be rejected on the ground of limitation as Section 149 of the Customs Act which provides for amendment of the shipping bill does not prescribe any limitation and therefore the period of 3 months specified in the circular is beyond the scope of Section 149.

It was evident that the circular states a specific requirement that the documents must show the use of the inputs in the resultant export product, the fact of export and the fulfilment of the conditions of the export promotion scheme is satisfactorily proved. The sole object is to avoid duplicity of the benefit under both schemes.

A two-member bench of P V SubbaRao,(Technical) and Binu Tamta, (Judicial) observed that the appellant is not entitled to the conversion of the DEEC  shipping bills to Drawback shipping bills since the appellant failed to apply within the time limit of 3 months and also filing the requisite documents.

The Tribunal relied on the decision in M/s Terra (supra), by the Delhi High Court and held that the appeal filed by the Appellant was barred by time and was rightly rejected by the competent authority and for the reason for non-filing of the requisite documents in terms of Section 149 of the Customs Act as well as the Circular. 

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