In a recent case, the Allahabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) upheld the amendment of the bill of entry under Section 149 of the Customs Act, 1962, and held that duty exemption certificates cannot be invalidated as delay occurred in applying before the concerned ministry. The bench found that the respondent had taken all the necessary steps to obtain the said certificate well in advance which was being delayed in the concerned ministry, even the submission of that application and receipt thereof can be considered as a valid document.
The Respondent-assessee, Industrial Foams Pvt. Ltd., requested an out-of-turn hearing on the appeal that the Appellant-revenue had filed. In his application dated November 15, 2021, the respondent requested a tariff exemption certificate from the Ministry of Environment and Forests for future imports that he would make. After submitting this request, he imported the contested goods and submitted Bill of Entry No. 7704341 on March 02, 2022, for the import consignment to be cleared. However, because the Ministry of Environment and Forest took a while to issue the disputed duty exemption certificate, he did not immediately clear the contested goods and instead allowed them to remain at the port for a while. Later on, to avoid any demurrage charges, he cleared the goods on 14 March, 2022 on payment of the required self assessed duty in absence of the said certificate.
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He subsequently received the aforementioned certificate for the clearance of the products for which the application was submitted in 2020–21 from the Ministry of Environment and Forest via Certificate No.641/2022 (C) dated 07.07.2022. The Original Authority rejected the Respondent’s request to alter the Bill of Entry under Section 149 of the Customs Act after receiving this exemption certificate. The irate respondent filed an appeal with the Commissioner (Appeals), and it was granted.
Unquestionably, the respondent applied to the relevant ministry for a duty exemption certificate well in advance of the date of importation. They did so solely because they had not received the certificate and wanted to prevent additional demurrage charges, so they cleared the goods based on their own assessment in order to pay the duty. Following receipt of the aforementioned certificate, they have requested that the Bill of Entry be modified in accordance with Section 149 of the Customs Act.
Revenue has contested the Commissioner (Appeals)’s ruling, arguing that as the respondent did not receive the aforementioned certificate of exemption on the date of exemption, it cannot be regarded as a legitimate document for the purpose of modification in bill of entry.
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Even the submission of that application and receipt of it can be regarded as a valid document for the purpose of allowing the benefit of exemption in terms of Doctrine of Substantial Compliance. This was determined by a two-member bench consisting of P.K. Choudhary, Member (Judicial), and Sanjiv Srivastava, Member (Technical). The respondents had taken all the necessary steps to obtain the said certificate well in advance, which was causing delays in the concerned ministry. The desired amendment under Section 149 of the Customs Act of 1962 ought to have been granted.
Since Section 149 of the Act is sufficiently broad to address such exigencies, the denial of the modification for the reasons outlined in the appeal cannot be upheld, and as a result, the revenue’s appeal is without merit.
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