The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) dismissed an appeal regarding the conversion of shipping bills from the Drawback Scheme to the Advance License Scheme after availing Drawback benefits. The decision highlights the intricacies of export promotion schemes and the importance of adherence to prescribed procedures.
The case involved an exporter of pharmaceutical products who sought to convert shipping bills filed under the Drawback Scheme to the Advance License Scheme.
The appellant, Stallion Laboratories Pvt Ltd had already availed benefits under the Drawback Scheme but later wished to claim benefits under the Advance License Scheme. However, their request for conversion was denied by the Directorate General of Foreign Trade ( DGFT ).
The appellant then approached Customs authorities with an offer to repay the Drawback benefits with interest and sought conversion of the shipping bills. However, their request was rejected by the Customs authorities, leading to the filing of an appeal before the CESTAT.
The appellant, represented by Shri. R.R. Dave argued that the conversion of shipping bills had been permitted in similar cases by various judicial decisions. They cited precedents where courts had allowed conversion even after a considerable period had elapsed from the date of export.
The respondent revenue, Customs Commissioner, Ahmedabad represented by Shri. Anand Kumar emphasised the findings of the original order, which refused conversion based on the provisions of Circular No. 36/2010-Cus and relevant legal precedents.
The CESTAT analysed the legal provisions governing the conversion of shipping bills and the conditions laid down in Circular No. 36/2010-Cus. The tribunal noted that while previous court decisions had struck down certain limitations on conversion, the conditions outlined in the circular remained binding.
The bench particularly highlighted para 3(e) of the circular, which states that conversion cannot be allowed if the exporter has already availed benefits under the scheme under which the goods were exported. Considering this provision, the CESTAT concluded that once benefits under the Drawback Scheme had been availed, conversion to the Advance License Scheme could not be permitted.
The bench also emphasised the need for finality in export scheme decisions and the importance of adherence to prescribed procedures. It noted that allowing conversion after benefits had been availed could jeopardize revenue interests and undermine the integrity of export promotion schemes.
In result, the single bench of Mr. Somesh Arora (Judicial Member) dismissed the appeal affirming the principle that once benefits under a particular export scheme have been availed, conversion to another scheme cannot be permitted, in line with Circular No. 36/2010-Cus and relevant legal precedents.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
