Case Law Details

Case Name : Principal Commissioner of Customs (ACC) Vs Contemporary Leather Pvt. Ltd. (CESTAT Chennai)
Appeal Number : Customs Appeal No. 40524 of 2022
Date of Judgement/Order : 28/11/2023
Related Assessment Year :

Principal Commissioner of Customs (ACC) Vs Contemporary Leather Pvt. Ltd. (CESTAT Chennai)

Introduction: The recent case of “Principal Commissioner of Customs vs. Contemporary Leather Pvt. Ltd.” heard by CESTAT Chennai delves into allegations of failure to adhere to examination norms prescribed under CBEC Circular during the conversion of shipping bills. The appeal, filed by the Department, was dismissed by the Tribunal, prompting a closer examination of the underlying issues.

Detailed Analysis: The dispute arose when M/s. Contemporary Leather Private Limited sought the conversion of Free Shipping Bills to Drawback Shipping Bills for exports made between 2013-14 and 2016-17. Despite the rejection of the initial request, the Tribunal, in Final Order No.42456/2021, allowed the appeal. The Tribunal directed the adjudicating authority to verify the timeline and specified criteria, as seen in the case of M/s. Autotech Industries (India) Pvt. Ltd.

In response, the Principal Commissioner of Customs passed an order allowing the conversion of 342 free shipping bills to drawback shipping bills within a three-year period. The Department, aggrieved by this decision, filed an appeal, asserting non-compliance with Section 149 of the Customs Act, 1962, and CBEC Circular No.36/2010.

During the proceedings, the Department argued that the Tribunal overlooked crucial aspects, including the examination norms outlined in CBEC Circular No.6/2002 and the time frame for conversion requests. The Commissioner’s decision, according to the Department, did not align with statutory provisions.

The respondent’s counsel countered, emphasizing that the Commissioner followed the Tribunal’s directive in line with the Final Order. The appeal, they argued, was an attempt to challenge the Tribunal’s decision indirectly without filing a direct appeal against the Final Order.

Conclusion: CESTAT Chennai dismissed the Department’s appeal, highlighting the need for a proper legal approach. The Tribunal emphasized that when its Final Order sets aside a departmental decision, the appropriate recourse for the department is to appeal directly to a higher forum. In this case, the Commissioner’s adherence to the Tribunal’s directive was deemed correct. The matter, falling within the monetary limits of the new Litigation Policy for Customs cases, underscores the significance of procedural adherence and legal strategy in Customs disputes.

FULL TEXT OF THE CESTAT CHENNAI ORDER

The above appeal has been filed by the Department against the order passed by the Principal Commissioner of Customs, Chennai dated 19.07.2022.

2. Brief facts are that the respondent herein viz. M/s. Contemporary Leather Private Limited, Chennai vide letter dt. 23.11.2017 had requested for conversion of Free Shipping Bills to Drawback Shipping Bills with regard to the exports made by them for the period from 20 13-14 to 20 16-17. The request was rejected. The respondent filed an appeal before the Tribunal. As per the Final Order No.42456/2021 dated 07.12.2021 the Tribunal allowed the appeal observing that the request for conversion of the shipping bills falling within the period of three years when computed from the application i.e., 23.11.2021, is to be allowed. The adjudicating authority was directed to verify as to whether any shipping bill is filed beyond the limitation period of three years as stated in the decision of the Tribunal in the case of M/s. Autotech Industries (India) Pvt. Ltd. [Final order No.42351 of 2021 dated 30.09.2021]. The operative part of the order passed by the Tribunal in the said case reads as under :

“15. In the result, the impugned order is set aside and the request for conversion of the shipping bills falling within the period of three years when computed from the date of application i.e., 23.11.2017, is allowed. The Adjudicang Authority is directed to check as to whether any shipping bills falls beyond the limitation period of three years as stated in the decision of the Tribunal in M/s. Autotech Industries (India) Pvt. Ltd. (supra).”

3. Pursuant to the said final order, the matter was taken up by the Principal Commissioner of Customs and the present impugned order was passed wherein the conversion of 342 numbers of free shipping bills to drawback shipping bills falling within the period of three years from the date of application was allowed. The Department has filed the present appeal aggrieved by such order.

4. The Ld. A.R Shri M. Ambe submitted that the Tribunal while allowing the appeal and directing to verify failed to take into consideration that as per Section 149 of the Customs Act, 1962 read with CBEC Circular No.36/2010 dated 23.09.2010, conversion of shipping bills from schemes which involves more rigorous examination (or) within the schemes involving same level of examination is not permitted. Moreover, the request for conversion should have been made by the exporter within three months from the date of Let Export Order (LEO) for which only the Commissioner is empowered to examine the request for conversion of shipping bills on merits. It is asserted by the Ld. A.R that the examination norms prescribed under CBEC Circular No.6/2002 dt. 23.0 1.2002 has not been followed by the Commissioner while allowing conversion of shipping bills. It is prayed that the appeal may be allowed.

5. The Ld. Counsel Shri R. Ravikumar appeared and argued for the respondent. It is submitted by the learned counsel that the Adjudicating Authority (Principal Commissioner) has passed the order pursuant to the Final Order passed by the Tribunal. The Department has not filed any appeal against said Final Order dt. 09.2021 passed by the Tribunal. The grounds stated in the appeal are challenging the Final order passed by the Tribunal in the respondent’s case (supra) for which the right remedy would be to file an appeal before the Hon’ble High Court. Without filing an appeal before the Hon’ble High Court, the department has filed this appeal before the Tribunal challenging the order passed by the Principal Commissioner stating that the conversion of shipping bills allowed by the Tribunal is erroneous. The same cannot be accepted. It is prayed that the appeal may be dismissed.

6. Heard both sides.

7. After perusal of the grounds of appeal, I find that the Review Committee has put forward grounds challenging the Final order passed by the Tribunal dt. 30.09.2021 directing the adjudicating authority to verify and allow the conversion of shipping bills. When the order passed by the department denying the request for conversion has been set aside by the final order dt. 30.09.2021 passed by Tribunal, the only remedy available for the department is to file an appeal against such order before the Higher Forum. The Tribunal while passing the Final order has already taken into consideration the Board’s circular as well as the decisions passed on the very same issue. The Commissioner has correctly followed the direction of the Tribunal and passed the impugned order. For this reason, I do not find any grounds to interfere with the impugned order. Same is sustained.

8. On perusal of records, it is seen that the matter does not involve any duty, penalty or fine, or confiscation of goods and it falls below Rs.50 lakhs and therefore falls under the new Litigation Policy with regard to Customs cases to be filed before the Tribunal. The appeal falls within the monetary limits of litigation policy.

9. In the result, Appeal filed by Department is dismissed.

(Dictated and pronounced in court)

Download Judgment/Order

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