Conversion of Drawback Shipping Bills to DFIA Shipping Bills allowable as No Time limit mentioned u/s 149 of Customs Act: CESTAT rules in favour of Intel Technology Ltd [Read Order]

In a ruling in favour of Intel Technology Ltd, the Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) ruled that conversion of drawback shipping bills to DFIA shipping bills is allowable as there is no time limit mentioned under Section 149 of the Customs Act, 1962.

The Revenue filed an appeal against Order-in-Original passed by the Principal Commissioner of Customs, Bangalore.  The respondent, M/s. Intel Technology India Pvt. Ltd., had filed 11 Shipping Bills from 14.05.2020 to 03.07.2021 mentioning that filed for ‘No Foreign Exchange Involved’ ( NFEI ) instead of Commercial Transaction Mode or against remittance. At a later date on 10.08.2021 and 14.12.2021 to comply with the RBI compliance and to complete the EDPMS process, they requested for amending these 11 Shipping Bills to Scheme Code 21.

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 The Principal Commissioner in the impugned order taking into consideration the provisions of Section 149 of the Customs Act, 1962 and the CBIC Circular No.36/2010 dated 23.09.2010 allowed conversion of these shipping bills from NFEI 99 to EOU / EPZ / SEZ / EHTP / STP (21) on the ground that they do not claim any export incentive schemes. 

On review, the Department is in appeal only on the ground that the request for conversion by the respondent was made after a period of three months as against the CBIC Circular No.36/2010 dated 23.09.2010 which specifically under Clause 3(a) mentions that ‘The request for conversion is made by the exporter within three months from the date of Let Export Order ( LEO )’.  It is also submitted that the authorities are bound by the said Circular and hence, the impugned order is to be set aside.

The Authorised Representative ( AR ) for the Revenue submitted that the CBIC Circular dated 23.09.2010 relied upon by the Principal Commissioner clearly specifies the time line of three months and hence, the request for conversion filed beyond three months cannot be accepted. 

The counsel for the respondent submitted that the conversion was accepted by the Principal Commissioner from ‘No Foreign Exchange Involved’ ( NFEI ) to EOU/other schemes since it was a fact that they had inadvertently mentioned NFEI and Section 149 of Customs Act, 1962 allowed such amendments.

The limited issue to be decided in this appeal is whether the Principal Commissioner had rightly allowed the conversion of 11 Shipping Bills from NEFI to EOU and other schemes. It is an admitted fact that this conversion has no revenue implication since the conversion was allowed only on the ground that the respondent does not claim any export incentive schemes.

 The only ground taken by the Revenue is that the request for conversion was filed beyond three months and this issue is no more res integra as it is covered by various decisions of the Tribunal and the Hon’ble High Court where such conversions were allowed even in cases where the request was filed beyond three months since the Section 149 of the Customs Act, 1962 does not specify any time limit. 

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It was evident that no time limit is prescribed.A two member bench of  Dr. D.M. Misra, Member (Judicial) and  R. Bhagya Devi, Member (Technical) found that the request of the appellant for conversion was rejected on the sole ground of limitation as prescribed under Board Circular No. 36/2010-Cus.

Since the time limit has not been prescribed under the Act, the same cannot be fixed by way of the circular. Therefore, if at all there is a time limit by way of circular, it is only procedural requirement. Therefore, on this ground of limitation, application could not have been rejected, particularly when circular prescribing time limit is without authority of any statutory provision, Act and rules supported.

It was viewed that the appellant is legally entitled for conversion of Drawback Shipping Bills to DFIA Shipping Bills in respect of 184 Shipping Bills as per the list provided in appeal along with the appeal memo. The respondent Commissioner is directed to issue necessary certificate enabling appellant to get the DFIA licenses revalidated.

In view of the above, the CESTAT upheld the impugned order and dismissed the appeal filed by the Revenue.

To Read the full text of the Order CLICK HERE

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