In a recent judgement, the Chandigarh bench of the Customs, Excise & Service Tax Appellate Tribunal( CETSTAT) has held that conversion from DEPB scheme to another scheme under section 149 of the Customs Act, 1962 is allowable.
M/s Crown Milk Specialities Private Limited, the appellant is engaged in the manufacture of Milk Products and they have exported their products to Germany by various shipping bills.
As per the appellant, they have exported the goods for the first time, and shipping bills were filed under the Drawback Scheme where the rate of drawback was 1% whereas the appellant was duly entitled to export under the DEPB Scheme at the rate of 9%.
On coming to know that the Customs House Agent(CHA) has wrongly filed shipping bills under the Drawback Scheme instead of the DEBP Scheme, the appellant filed an application dated 08.07.2010 for conversion of shipping bills from drawback to DEPB under Section 149 of the Customs Act, 1962.
The Respondent has rejected the claim of the appellant taking the view that conversion is allowed where the benefit of the export promotion scheme claimed by the exporter has been denied by DGFT/MOC from customs due to any dispute. On Appeal, the Commissioner (Appeals), rejected the request for conversion of shipping bills by relying upon the Board Circular No. 04/2004 dated 16.01.2004.
The appellant submitted that the impugned order is not sustainable in law as the same has been passed by relying upon the old Board Circular which has been subsequently changed by issuance of a new Circular. He further submitted that the Board Circular No. 04/2004 dated 16.01.2004 relied upon by both the lower authorities have been substituted by another Circular No. 36/2010 dated 23.09.2010 which allows conversion of shipping bills from one scheme to another.
He further submitted that in Circular No. 36/2010 dated 23.09.2010 itself, it is provided that in both the drawback scheme and DEPB scheme, there is the same level of examination and therefore, conversion is permissible.
A coram comprising Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) observed that the request for conversion was made within six months from the date of export whereas under Circular No. 36/2010 conversion is allowed if the request for the same is filed within three months from the date of let export order.
Further viewed that the said condition of the prescribed time limit of three months has been set aside by various courts including the Jurisdictional High Court of Punjab and Haryana in the case of Commissioner of Customs Vs. Mrs Bectors Food Specialities Ltd.
It was observed that in many judgements the court allowed the conversion from one scheme to another scheme under Section 149 of the Customs Act, 1962 and by relying on that the CESTAT set aside the impugned order.
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