Limitation Act Does Not Apply to Conversion of Shipping Bills u/s 149 of the Customs Act: CESTAT [Read Order]

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the Limitation Act does not apply to requests for conversion of Shipping Bills made under Section 149 of the Customs Act, 1962, and that the Customs Department cannot reopen the issue after the Tribunal has already allowed conversion for the entire period.

ADF Foods Ltd., the respondent, is an exporter who had filed Shipping Bills under the Duty Drawback Scheme over a period of more than ten years. At a later stage, the exporter sought conversion of these Shipping Bills from the Duty Drawback Scheme to the DFIA scheme by filing an application under Section 149 of the Customs Act.

The Commissioner of Customs partly allowed the request and permitted conversion only for Shipping Bills relating to a period of three years. Conversion for the remaining Shipping Bills was rejected on the ground that the request was barred by limitation under Article 137 of the Limitation Act, 1963.

Aggrieved by the partial rejection, the exporter approached the CESTAT. The Tribunal, by its earlier order dated 17.07.2025, allowed conversion of all Shipping Bills for the entire period of more than ten years, holding that the Limitation Act does not apply to proceedings under Section 149 of the Customs Act.

Subsequently, the Customs Department filed the present appeal before the Tribunal, challenging even that part of the Commissioner’s order which had allowed conversion for three years.

The department argued that applications for conversion of Shipping Bills are governed by Article 137 of the Limitation Act and that the Commissioner had wrongly allowed conversion even for three years. The department also relied on Circular No. 36/2010-Cus to argue that such conversion was restricted where export benefits had already been availed.

The counsel for the exporter argued that Section 149 of the Customs Act does not prescribe any time limit for conversion of Shipping Bills. They further argued that the Tribunal had already decided the issue in favour of the exporter in the earlier appeal and that the department was barred from reopening the matter. The exporter also argued that conditions imposed through circulars cannot override the clear language of the statute.

The two-member bench comprising Dr. Suvendu Kumar Pati (Judicial Member) and M.M. Parthiban (Technical Member) observed that, as per Supreme Court decisions including M.P. Steel Corporation, the Limitation Act applies only to proceedings before courts and not to tribunals or quasi-judicial authorities. The tribunal observed that Article 137 applies only to applications filed before civil courts and not to applications made under Section 149 of the Customs Act.

The tribunal explained that Section 149 does not prescribe any time limit for conversion of Shipping Bills and that such conversion can be allowed on the basis of documentary evidence. It pointed out that restrictions introduced through Circular No. 36/2010-Cus cannot impose conditions that are not found in the statute itself.

The tribunal further observed that its earlier order allowing conversion for the entire ten-year period had merged with the Commissioner’s order. As a result, the department was barred by the doctrine of merger and principles of res judicata from challenging the partial relief granted earlier.

The tribunal dismissed the appeal filed by the Customs Department and upheld the validity of conversion of Shipping Bills in favour of the exporter.