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Claim MEIS benefit can’t be denied merely on procedural defects: Kerala High Court [Read Order]

Kerala High court -MEIS - procedural defects - MEIS benefit -Taxscan

The Kerala High court held that the claim Merchandise Export from India Scheme (MEIS) benefit can’t be denied merely on procedural defects.

The respondent, N.C.John and Sons Pvt. Ltd. had filed 29 shipping bills. All the exports covered under the bills were either under the drawback scheme or EOU Scheme. In all the shipping bills, the respondent had declared their intention to claim Merchandise Export from India Scheme (MEIS) benefits.

According to the respondent, in the column which asks whether the shipping bills need to be transmitted to the Director-General of Foreign Trade (DGFT), it was inadvertently entered as ‘N’ instead of ‘Y’.

The incentive under the scheme is issued in the form of duty credit scrips. The shipping bills were not electronically transmitted to the DGFT for processing the MEIS scrips. The respondent hence could not file their MEIS claim.

The respondents requested the Department to allow amendment of the shipping bills by correcting the endorsement from ‘N’ to ‘Y’. It was held that the declaration of intent of the exporter is a vital factor that decides the norms of examination of the consignment exported under the reward scheme and that allowing an amendment of the shipping bills would mean the conversion of the shipping bills from one export promotion scheme to another.

Since the exporters had not followed the procedure and conditions laid down in the circular dated September 23, 2010, it was held that the request for amendment cannot be acceded to.

The respondent preferred an appeal before the CESTAT wherein it was found that the respondent had as a matter of fact declared their intention to claim MEIS benefit in all the shipping bills which have been produced. It was noticed that the only lapse on the part of the respondent was that, in the reward column instead of mentioning ‘Y’ it was mentioned as ‘N’.

The Tribunal held that it is only a procedural defect and that the respondent is entitled to MEIS benefit.

The two-member bench of Justices K.Vinod Chandran and T.R. Ravi in the light of Section 149 which pertains to the amendment of document held there can be no denial of the permission to amend the shipping bills.

The bench upheld the decision of the CESTAT and said, “the respondent had declared their intention and that here also there is a case of an inadvertent mistake in checking the column ‘N’ instead of ‘Y’.

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