No conversion of DEEC Shipping Bills of IOCL to Drawback Shipping Bills since barred by limitation

Indian Oil Corporation Ltd Vs Commissioner of Customs Acc (Export) (CESTAT Delhi)

Conclusion: IOCL was not entitled for the conversion of DEEC shipping bills to drawback shipping bills since it was barred by limitation and was rightly rejected by the competent authority and for the reason for non-filing of the requisite documents in terms of Section 149 of the Customs Act as well as the Circular.

Held: IOCL was registered with the Central Excise Department as Export Warehouse for supply of Excise Bonded Aviation Turbine Fuel (ATF) to aircrafts on foreign run and filed DEEC Shipping Bills with effect from 16.07.2010 against Advance Authorization / Licence obtained by them from DGFT as per Foreign Trade Policy 2009 – 2011. That IOCL made an application under section 149 of the Customs Act, 1962 requesting for conversion of the DEEC shipping bills to drawback shipping bills on the ground that due to abolition of customs duty on crude oil with effect from 25.06.2011 they could not avail duty free import benefit of ATF exported by them during the period October 2010 to August 2011. The request of IOCL in terms of the aforesaid applications for conversion of DEEC shipping bills to drawback shipping bills to avail duty drawback was examined in terms of the provisions of section 149 of the Customs Act read with the CBEC’s Circular No. 36 / 2010-Cus dated 23.09.2010, however the same were found to be time-barred and were accordingly rejected vide order dated 15.02.2012.  It was contended by assessee that the application for conversion of shipping bills could not be rejected on the ground of limitation as Section 149 of the Customs Act which provided for amendment of the shipping bill did not prescribe any limitation and therefore the period of 3 months specified in the circular was beyond the scope of Section 149. It was held that assessee was not entitled to the conversion of the DEEC  shipping bills to Drawback shipping bills since the appellant failed to apply within the time limit of 3 months and also filing the requisite documents. The violation of the above two conditions of making the application within the time limit of 3 months and also filing of the requisite documents, assessee was not entitled for conversion of the DEEC shipping bills to Drawback shipping bills. The benefit of conversion from one export promotion scheme to another was by virtue of the circular so the assessee could not say that they were entitle to claim the benefit under the circular but at the same time they were not required to comply with the conditions stipulated therein. Assessee could not pick and choose the terms of the circular. Tribunal relied on the decision in M/s Terra by the Delhi High Court and held that the appeal filed by assessee was barred by time and was rightly rejected by the competent authority and for the reason for non-filing of the requisite documents in terms of Section 149 of the Customs Act as well as the Circular. .

FULL TEXT OF THE CESTAT DELHI ORDER

The appellant, M/s Indian Oil Corporation (hereinafter referred to as the IOC) has filed the present appeal challenging the order of the Commissioner Custom, Air Cargo Export dated 18.6.2012 whereby the request of the IOC for conversion of DEEC Shipping Bills to Drawback Scheme was rejected.

2. Facts of the case are that IOC is registered with the Central Excise Department as Export Warehouse for supply of Excise Bonded Aviation Turbine Fuel (ATF) to aircrafts on foreign run and filed DEEC Shipping Bills with effect from 16.07.2010 against Advance Authorization / Licence obtained by them from DGFT as per Foreign Trade Policy 2009 – 2011.

3. That IOC made an application dated 22.08.2011 under section 149 of the Customs Act, 1962 requesting for conversion of the DEEC shipping bills to drawback shipping bills on the ground that due to abolition of customs duty on crude oil with effect from 25.06.2011 they could not avail duty free import benefit of ATF exported by them during the period October 2010 to August 2011. Following this, letters dated 04.10.2011, 09.11.2011, 29.12.2011 and 19.01.2012 were subsequently made as per the chart given below:

4. The request of IOC in terms of the aforesaid applications for conversion of DEEC shipping bills to drawback shipping bills for the purpose of availing duty drawback were examined in terms of the provisions of section 149 of the Customs Act read with the CBEC’s Circular No. 36 / 2010-Cus dated 23.09.2010, however the same were found to be time barred and were accordingly rejected vide order dated 15.02.2012. On the request of the appellant vide letter dated 16.04.2012, the adjudicating authority passed a detailed reasoned order dated 18.06.2012, which is under challenge in this appeal.

5. We have heard Ms Reena Khair for IOC and Mr. Rakesh Kumar authorised representative for the revenue and have perused the records of the case.

6. The issue for our consideration is whether the impugned order rejecting the request made by IOC for conversion of DEEC shipping bills to Drawback shipping bills on the ground of delay and lack of documentary evidence is unsustainable?

7. The main argument of the learned Counsel for the appellant is that the application for conversion of shipping bills cannot be rejected on the ground of limitation as section 149 of the Customs Act which provides for amendment of the shipping bill do not prescribe any limitation and therefore the period of 3 months specified in the circular is beyond the scope of section 149. Secondly, according to her they have submitted all the relevant documents to the department and therefore the findings of the adjudicating authority on this is incorrect, particularly with reference to their letter dated 17.04.2011. In support of her contentions she has referred to several decisions deciding the issue in favour of the appellant.

8. On the contrary the authorised representative have pointed out that DEEC scheme and Drawback Scheme are two completely different schemes and require different customs examination of the export goods. Also the fact that goods were exported under section 50 and 51 of the Act and they were not available for examination as required under the Drawback Schemes. The documentary evidence which was in existence at the time of the export was neither available nor submitted by the appellant. The learned authorised representative stressed on the findings of the adjudicating authority and has prayed that the appeal needs to be rejected as the issue has been settled by the Delhi High Court, Madras High Court, Gujarat High Court and also the various Benches of the Tribunal.

9. The issue needs to be examined in the light of the provisions of section 149 of the Customs Act, Central Excise and Service Tax Drawback Rules, 1995 (hereinafter referred to as the Drawback Rules) and the Circular No. 36 / 2010-Cus dated 23.09.2010 and they are quoted herein below:

“Section 149. Amendment of documents.”

Save as otherwise provided in sections 30 and 41, the proper officer may, in his discretion, authorise any document, after it has been presented in the customs house to be amended:[In such form and manner, within such time, subject to such restrictions and conditions, as may be prescribed];

Provided that no amendment of a bill of entry or shipping bill or bill of export shall be so authorised to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be.

Rule 12. Statement/Declaration to be made on exports other than by Post. –

(1) In the case of exports other than by post, the exporters shall at the time of export of the goods –

(a) state on the shipping bill or bill of export, the description, quantity and such other particulars as are necessary for deciding whether the goods are entitled to drawback, and if so, at what rate or rates and make a declaration on the relevant shipping bill or bill of export that –

(i) a claim for drawback under these rules is being made;

(ii) in respect of duties of Customs and Central Excise paid on the containers, packing materials and materials and the service tax paid on the input services used in the manufacture of the export goods on which drawback is being claimed, no separate claim for rebate of duty or service tax under the Central Excise Rules, 2002 or any other law has been or will be made to the Central Excise authorities:

Provided that if the Commissioner of Customs is satisfied that the exporter or his authorised agent has, for reasons beyond his control, failed to comply with the provisions of this clause, he may, after considering the representation, if any, made by such exporter or his authorised agent, and for reasons to be recorded, exempt such exporter or his authorised agent from the provisions of this clause;

“CIRCULAR NO. 36/2010-CUSTOMS dated 23.9.2010

Shipping Bills: Conversion of free shipping bills to export promotion scheme shipping bills and conversion of shipping bills from one scheme to another – reg.

I am directed to invite attention to the Board‟s circular No.4/2004-Cus dated 16.01.2004 which debars conversion of free shipping bills to Advance License/DFRC/DEPB shipping bills and allows conversion of shipping bills from one export promotion scheme to another only where the benefit of an export promotion scheme claimed by the exporter has been denied by the DGFT/MoC&I or Customs due to any dispute.

2. It has been represented to the Board that the norms for allowing conversion of shipping bills may be relaxed and the Commissioners should be allowed to consider requests for conversion of shipping bills from free to export promotion scheme and from one export promotion scheme to another on a case to case basis depending on the merits of the case. It has also come to notice of the Board that the Tribunals in a series of judgments have held that amendment to shipping bill after export of goods is governed by the proviso to section 149 of the Customs Act, 1962 and if the requirements of the said proviso are satisfied, conversion of shipping bill should be allowed. The conversion of the shipping bill from one scheme to another cannot be linked with denial of benefit of one scheme by DGFT/MoC&I or Customs due to some dispute as no such condition for amendment of shipping bill has been provided in section 149 of Customs Act, 1962.

3. The issue has been re-examined in light of the above. It is clarified that Commissioner of Customs may allow conversion of shipping bills from schemes involving more rigorous examination to schemes involving less rigorous examination (for example, from Advance Authorization/DFIA scheme to Drawback/DEPB scheme) or within the schemes involving same level of examination (for example from Drawback scheme to DEPB scheme or vice versa) irrespective of whether the benefit of an export promotion scheme claimed by the exporter was denied to him by DGFT/DOC or Customs due to any dispute or not. The conversion may be permitted in accordance with the provisions of section 149 of the Customs  Act, 1962 on a case to case basis on merits provided the  Commissioner of Customs is satisfied, on the basis of documentary evidence which was in existence at the time the  goods were exported, that the goods were eligible for the export  promotion scheme to which conversion has been requested. Conversion of shipping bills shall also be subject to conditions as may be specified by the DGFT/MOC. The conversion may be allowed subject to the following further conditions:

a) The request for conversion is made by the exporter within three months from the date of the Let Export Order (LEO).

b) On the basis of available export documents etc., the fact of use of inputs is satisfactorily proved in the resultant export product.

c) The examination report and other endorsements made on the shipping bill/export documents prove the fact of export and the export product is clearly covered under relevant SION and or DEPB/Drawback Schedule as the case may be.

d) On the basis of S/Bill/export documents, the exporter has fulfilled all conditions of the export promotion scheme to which he is seeking conversion.

e) The exporter has not availed benefit of the export promotion scheme under which the goods were exported and no fraud/ misdeclaration /manipulation has been noticed or investigation initiated against him in respect of such exports.

4. Free shipping bills (shipping bills not filed under any export promotion scheme) are subject to ^„nil‟ examination norms. Conversion of free shipping bills into EP scheme shipping bills (advance authorization, DFIA, DEPB, reward schemes etc.) should not be allowed. However, the Commissioner may allow All Industry Rate of duty drawback on goods exported under free shipping bill, without conversion of such free shipping bill to Drawback Scheme shipping bill, in terms of the proviso to rule 12(1) (a) of the Customs, Central Excise and Service Tax Drawback Rules, 1995.

5. Due care may be taken while allowing conversion to ensure that the exporter does not take benefit of both the schemes i.e. the scheme to which conversion is sought and the scheme from which conversion is sought. Whenever conversion of a shipping bill is allowed, the same should be informed to DGFT so that they may also ensure that the exporter does not take benefit of both the schemes.

6. This circular supersedes the Board circular No.4/2004-Cus dated 16.01.2004 and the earlier circulars issued in the past on this issue. This circular shall be applicable only to shipping bills filed on or after the date of issuance of this circular. Till such time as EDI system is modified to allow conversion of shipping bill in the EDI system, conversion may be allowed manually.

7. A suitable Public Notice for information of the Trade and Standing Order for guidance of the staff may be issued. Difficulties faced, if any in implementation of the directions may be brought to the notice of the Board.

Kindly acknowledge receipt of this Circular.”

10. We now need to consider the rulings of the various Courts/Tribunals interpreting the provisions of section 149 along with the Circular on the subject. The Learned Counsel for the appellant has placed reliance on the decision of the Tribunal Chennai Bench in Diamond Engg. (Chennai) P. Ltd. Vs C. C. (Seaport-Export), Chennai, which decided the issue taking the view that the Circular is beneficiary in nature and the fact that section 149 of Customs Act does not prescribe any time limit, the amendment sought cannot be denied on the ground of limitation. The Learned Single Member distinguished the decision of the Delhi High Court in M/s Terra Films Pvt. Ltd., vs. Commissioner of Customs – 2011 (268) ELT 443 being factually different. The Hon‟ble High Court of Madras rejected the appeal filed by the department against the said order holding that no substantial question of law is involved, Commissioner of Customs Vs. M/s Diamond Engg. Chennai P. Ltd. 2019 – TIOL-HC-MAD-CUS. In so far as the present case is concerned, we do not find the same being distinguishable from the decision of the Delhi High Court in M/s. Terra (supra) and being the jurisdictional High Court we are bound by the said decision and the interpretation placed on Section 149 of the Customs Act and the Circular. The appellant had referred to certain latest decisions of various High Courts and Tribunal where the Circular No. 36 / 2010-Cus dated 23.09.2010 was under consideration. The findings in all these decisions is more or less the same that section 149 does not prescribe any time limit and the Circular has to be construed merely as guidelines for the Officers for the purpose of Section 149 and is not a statutory provision in terms of Section 149 of the Customs Act. The Gujarat High Court in The Principal Commissioner of Customs, Mundra Vs M/s Lykis Ltd. 2021 (377) ELT 646 decided the issue in favour of the exporter relying on the decision of the coordinate Bench in Parle Products Pvt. Ltd., vs. CC, Nhava Sheva -2017 (358) ELT 341. Similarly, the Punjab and Haryana High Court rejected the department’s appeal in the case of M/s Bectos Food Specialities Ltd. 2023 (3) TMI 78. Here the High Court quoted the impugned order of the Tribunal in that matter, where the judgement of the Gujarat High Court in the case of Anil Sharma and 1 Vs Union of India and 3 – 2017 (2) TMI 50- Gujarat High Court has been mentioned, however we do not find any discussion thereon. Moreover, the Punjab & Haryana High Court relied on the decision of High Court of Gujarat in Inter Continental (India) vs. Union of India – 2003 (154) ELT 37, affirmed by the Supreme Court in Union of India vs. Inter Continental (India) – 2008 (226) ELT 16, however the issue therein was on a different context that a circular subsequent to the Notification could not add new condition to the notification, which was passed after due publication, having placed before the Parliament. The same is not applicable herein. The appellant has relied on a decision of the Tribunal, Chennai Bench in the case of M/s Autotech Industries Vs. Commissioner of Customs, Chennai 2022 (380) ELT 364 where one of us was a Member [ Hon‟ble P V Subba Rao M(T)], on the issue of conversion of shipping bills to Drawback shipping bills being time barred in terms of Circular No 36/2010-Cus was decided in favour of the exporter on the principle that section 149 does not prescribe any time limit. The view taken was that amendment is merely a procedural requirement and law allows amendment of the shipping bill even after the goods have been exported, the only requirement is that the exporter has to produce documentary evidence which was in existence at the time when goods were exported relying on the decision of the jurisdictional High Court in M/s Hewlett Packard Enterprises India Pvt. Ltd., Vs Joint Commissioner of Customs 2020 (10) TMI 970, however, the decision of the Delhi High Court in M/s Terra (supra) was not taken note of. The decision in Autotech Industries was followed in M/s Carboline India Pvt. Ltd., Vs Commissioner of Customs, Chennai 2022 (381) ELT 397 holding that circular cannot be applied to reject the request of conversion / amendment of shipping bills.

11. We may now refer to the decisions cited by the Learned authorised representative for the revenue. The decision of the Delhi High Court in M/s Terra Films Pvt. Ltd., (supra), where the learned Division Bench dealt with similar fact situation of a request for conversion of the DEEC/DEPB shipping bills into DEEC/DEPB cum Drawback Scheme after lapse of more than one year though the shipping bills had mentioned about the scheme under which exports were made as DEEC/DEPB and the goods stood already exported. The Court considered the provisions of section 149 of the Customs Act and the guidelines contained in the Board’s Circular No. 4/2004 dated 16.01.2004 applicable at the relevant time and observed that the discretion vested in the proper officer to permit amendment in any document after the same has been presented in the customs house has to be though exercised judicially, it was qualified with the proviso that the amendment could be allowed only if it was based on documentary evidence in existence at the time the goods were exported. The Court also noticed that the request made for conversion from one scheme to another was a case of request for conversion and not of an amendment in as much as by converting from one scheme to another, it was not only addition of certain word but change of entire status and character of the documents. For enabling an exporter to draw the benefits of any scheme not only physical verification of documents is required but also verification of the goods of export and their examination by the customs was necessarily required to be done.

The above noted decision of the Delhi High Court was relied on by the Madras High Court in Commissioner of Customs (Sea Port-Export) Vs. M/s Suzlon Energy Ltd., 2013 (293) ELT 3, where the Division Bench again considered the issue of conversion of shipping bills under section 149 of the Customs Act read with Circular No. 4/2004 dated 6.01.2004 and held that conversion from one scheme to another is not an amendment simpliciter as under section 149 only simple amendment is permissible whereas in the case of conversion, the relevant Board’s Circular which governs the procedure for conversion will come into operation and the exporter is bound by such Circular.

The next in line is the decision of the Gujarat High Court in the case of Anil Sharma (supra), where the Learned Division Bench referring to the decisions in M/s. Terra (supra) and M/s Suzlon Energy Limited (supra) considered the issue of conversion with reference to Circular No 36/2010 dated 23.09.2010 (the said Circular is in question in the present case) and once again retreated the principles in following paragraph :

“6.1. Thus, the request of the petitioner which has been rejected by the respondent cannot be said to be a mere amendment in the shipping bill as contemplated under Section 149 of the Customs Act, but it will be case of conversion of one scheme to another scheme, for which, proper officer is required to verify whether the very manufactured final product which has been manufactured from the raw material has been exported or not.

7. The contention on behalf of the petitioner that as the case would fall under Section 149 of the Customs Act which does not prescribe any time limit and therefore, on the basis of material on record, which was available at the time of export, it could have been verified whether final goods manufactured from the raw material imported has been exported or not, can be verified is concerned, as such, as observed herein above Section 149 of the Customs Act will not be applicable. Even otherwise, it is required to be noted that what is considered at the time of DECC, the appropriate inquiry would be limited to the extent to satisfy the authority whether raw material which was imported has been used in manufacturing final product or not. So far as Advance Authorisation Scheme is concerned, the appropriate authority is required to consider after holding appropriate inquiry that the raw material which was imported has only been used in the manufacture of final product and that final product has been actually exported”.

We fully agree with the aforesaid decisions by the different High Courts and followed by other Benches of the Tribunal in Unique Pharmaceutical Laboratories Vs. Commissioner of Customs, Nhava Sheva 2017 (5) TMI 268 (T-Mum.), M/s PLG Power Ltd. Vs Commissioner of Customs (Export) Nhava Sheva 2019 (1) TMI1 672 and Doshion Ltd., Vs. CC, Ahmedabad 2017 (7) TMI 1026. The present case is squarely covered by these decisions and the objection by the appellant that they are with reference to the earlier Circular No 4 of 2004 is clearly untenable as the underlying principles governing the issue are the same.

12. We find that on the issue involved, there are conflicting decisions as pointed out by the learned counsel for the appellant and also by the authorised representative for the revenue. In that event, the option available with us is in terms of the decision in M/s Atma Steels P. Ltd. & Ors. Vs. CCEx, Chandigarh 1984 (17) ELT 331 wherein the Larger Bench of the Tribunal consisting of five members in view of all India jurisdiction held that the Tribunal cannot be bound to the view of anyone of the High Court but has a judicial freedom to consider the conflicting views, reflected by different High Courts and adopt the one considered to be more appropriate to the facts of a given case before the Tribunal. The Apex Court in the case of M/s East India Commercial Co. Ltd., Vs. Collector of Customs, Calcutta, 1983 (13) ELT 1342 held that the law declared by the highest court in the State is binding on authorities or tribunal under its superintendence. Following the decision of the Apex Court in East India, the Tribunal in the case of Madura Coats Vs CCE, Bangalore 1996 (82) ELT 512, reiterated that the decision of a particular High Court should certainly be followed by all authorities within the territorial jurisdiction of that High Court and that the authorities in another State are not bound to follow the views taken by a particular High Court in the absence of a decision by the jurisdictional High Court. All the aforesaid decisions have been relied on by the Larger Bench of the Tribunal in CCEx, Chandigarh Vs Kashmir Conductors 1997 (96) ELT 257.

We find that the High Court of Delhi in the case of M/s Terra (supra) held:

“6. As per proviso of this Section 149, no amendment of a shipping bill was to be allowed after the export goods have been exported except on the basis of the documentary evidence, which was in existence at the time the goods were exported. The submission of the learned counsel for the appellant/ exporter in this regard was that the exporter was in possession of all the documents at the time of export to show that it was entitled to claim under the DEPB/DECC cum drawback scheme. From the plain reading of Section 149, it may be seen that exporter could not claim amendment in routine and as a matter of right. The discretion vested in the Proper Officer to permit amendment in any document after the same has been presented in the Customs house. Though this discretion was to be exercised judiciously, but it was qualified with the proviso that the amendment could be allowed only if it was based on the documentary evidence in existence at the time the goods were exported. The Commissioner in the remand case has rightly observed that the present case in fact relates to the request for conversion of shipping bills from one export promotion scheme into another and was not merely of an amendment in the shipping bill. The request was made for conversion from one scheme to another after the lapse of long period of more than one year. It was a case of request for “conversion” and not of “amendment” inasmuch by converting from one scheme to another, it was not only addition of word “cum” duty drawback, but change of entire status and character of the documents. Even if it was to be taken as a case of amendment, the proper officer may not be in possession of the documents sought to be amended after lapse of such a long period, particularly when the goods already stood exported. For enabling an exporter to draw the benefits of any scheme, not only physical verification of documents would be required, but as is noted by both the authorities below, the verification of the goods of export as also their examination by the Customs was necessarily required to be done. In the given factual circumstances, that was rightly held to be impossible. The commissioner in the remand case rightly distinguished the cases cited on behalf of the exporter from the facts of the present. The finding of fact as arrived at by the Commissioner has been rightly upheld by the CESTAT.”

In the light of the above discussion, we agree with the aforesaid observations and the conclusion arrived at in that regard in view of the observations of the Apex Court in the case of M/s East India Commercial Co Ltd Vs. Collector of Customs, Calcutta, 1983 (13) ELT 1342.

13. We may now consider the Circular No. 36/2010 dated 23.06.2010 closely as the Circular No 4/2004 dated 16.1.2004 allowed conversion of shipping bills from one export promotion scheme to another only where the benefit of the export promotion scheme was denied by the DGFT/ MoC&I or Customs ^„due to any dispute‟. In other words, under earlier Circular conversion from one scheme to another was allowed on very limited ground. The relaxation in granting conversion under the present circular No 36/2010 was provided only because of the representation made to the Board and keeping in view the various decisions of the Tribunal that amendment to shipping bill after export of goods is governed by the proviso to Section 149 of the Customs Act, 1962 and if the requirements of the said proviso are satisfied, conversion of shipping bill should be allowed. Accordingly, it was clarified that conversion may be permitted in accordance with the provisions of section 149 of the Customs Act on a case to case basis on merits provided the Commissioner of Customs is satisfied on the basis of documentary evidence which was in existence at the time the goods were exported to ascertain that goods were eligible for the export promotion scheme to which conversion has been requested. The conversion was then made subject to certain other conditions, primarily the time limit to make the application for conversion, within a period of three months from the date of Let Export Order (LET). The other conditions relate to the specifications of the documentary evidence. In interpreting the applicability of the circular and whether the conditions set out are mandatory or directory, we need to look into the object in adding those conditions in the circular. The underline object of the circular no doubt is to relax the norms for granting conversion of one export promotion scheme to another, however at the same time the circular provides that due care should be taken to ensure that the exporter does not take the benefit of both the schemes, i. e. the scheme to which conversion is sought and the scheme from which conversion is sought. The conditions enshrined in the circular would definitely enable the department to achieve the objective to avoid duplicacy of the benefit which would prejudice the revenue. If the request / application seeking conversion is made within a specified period, it would enable the department to verify the claim diligently and promptly as also the availability of the documents. In the present case as noted by the adjudicating authority there has been delay of nearly 6 months to 1 year which is beyond the permissible time limit and for which no reason have been stated by the appellant.

14. The next condition under the circular is regarding the satisfaction of the Commissioner of Customs on the basis of the documentary evidence as without it, it would not be feasible for the department to verify the claim for conversion. As is evident from the circular quoted above, the specific requirement is that the documents must show the use of the inputs in the resultant export product, fact of export and the fulfilment of the conditions of the export promotion scheme is satisfactorily proved. The sole object is to avoid duplicity of the benefit under both the schemes. In the present case, the adjudicating authority has specifically observed that the applications made are lacking supporting documents copies of Shipping Bills, Export Invoices, Airway Bill and Advance Authorizations / Licenses.

To quote from the findings of the adjudicating authority :

“Documents relating to 247 shipping bills and 468 shipping bills were sent on 18.12.11 and 27.12.11 respectively. However, the documents viz., copies of Shipping Bills, Export Invoices and Advance Authorization / licence in respect of ATF exported against 5801 shipping bills and 3881 shipping bills have not been submitted till date.”

Accordingly, it was concluded:

“I find that IOC not only failed to submit the documents within 3 months time but also failed to apply for the conversion. In some cases they have even yet till the passing of this order not submitted the relevant export documents for consideration by the competent authority. Mere mentioning the details of Advance Authorization and DEEC shipping bills number against which ATF was exported in the letters do not provide sufficient material for consideration of the request for conversion which is to be done as per the provisions of Section149 of the Customs Act, 1962 and the Board’s Circular No 36 /10-Customs dated 23.09.2010.”

We would also like to take note of the contention raised by the appellant that their application dated 13.02.12 for conversion of 3881 shipping bills was within 3 months from the date of ^„Let Export Order‟ but the adjudicating authority found that no export documents for which conversion is sought were submitted by them to the department even till the date of the order. The appellant has referred to their letter dated 16/17.04.2012 whereby according to them they had submitted the documents. The said letter has been submitted much after the rejection order dated 15.02.2012 by the competent authority and therefore the same has no relevance. We cannot ignore these findings though the appellant had submitted that they have filed the requisite documents.

15. We would like to refer to the decision in Indian Aluminum Company Ltd Vs Thane Municipal Corporation 1991(55) ELT454, where the Apex Court observed that in the matter of exemption or concessions the non observance of even procedural condition should not be condoned, if it is likely to facilitate commission of fraud and introduce administrative inconveniences. Further, the Court was pleased to observe that:

“The learned Counsel, however, submitted that even now the authorities can verify the necessary records which are audited and submitted to the authorities and find out whether the material was used in its own undertaking or not. We do not think we can accede to this contention. Having fail to file the necessary declaration he cannot now turn around and ask the authorities to make a verification of some records. The verification at the time when the raw material was still there is entirely different from a verification at a belated stage after it has ceased to be there. Maybe that the raw material was used in the industrial undertaking as claimed by the petitioner company or it may not be. In any event the failure to file the necessary declaration has necessarily prevented the authorities to have a proper verification.”

“Therefore, presumably to achieve the two fold object, namely prevention of fraud and facilitating administrative efficiency the exemption given is made subject to a condition that the person claiming the exemption shall furnish a declaration form in the manner prescribed under the section. The liberal construction suggested will facilitate the commission of fraud and introduce administrative inconveniences both of which the provisions of the said clauses seek to avoid.”

16. The appellant at the time of export had not mentioned anything on the shipping bills about the rate of duty drawback or other requirements as per Drawback Rules. Therefore, the Customs Officer had not examined the goods at the time of export for the purpose of drawback benefits. Applying the aforesaid principles laid down by the Apex Court in Indian Aluminium Companies (supra) we are of the considered view that since the exporter failed to furnish the details to avail the drawback at the time of filing of shipping bills and clearance of export goods, the documentary evidence in that regard cannot be subsequently furnished.

17. The Apex Court in Collector of , Vadodra Vs. Dhiren Chemical Industries 2002 (139) ELT 3 while interpreting the phrase, “on which the appropriate amount of duty has already been paid”, observed that the circulars issued by the Central Board of Excise and Customs are binding on the revenue regardless of the interpretation placed by the Court. In that view, the circular in question is binding on the department and the same requires to be strictly followed.

18. The violation of the above two conditions of making the application within the time limit of 3 months and also filing of the requisite documents, the appellant is not entitle for conversion of the DEEC shipping bills to Drawback shipping bills. The benefit of conversion from one export promotion scheme to another is by virtue of the circular so the appellant cannot say that they are entitle to claim the benefit under the circular but at the same time they are not required to comply with the conditions stipulated therein. The appellant cannot pick and choose the terms of the circular.

19. The contention raised by the appellant that the circular by prescribing the period of 3 months for making the application for conversion of the scheme is beyond the provisions of section 149 of the Customs Act is already unsustainable. We do not agree with such a submission for the simple reason that section 149 is silent on the aspect of limitation and the circular has only filled in that lacuna which does not amount to overriding the statutory provision. A circular though being a subordinate legislation can very well provide for the actual modalities for working out the provisions of the statute specially when the main statue its silent on that aspect. If the circular can be accepted for extending the benefit to the exporter it can also impose conditions for receiving those benefits. The Apex Court in Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd., (2013) 5 SCC 470 was pleased to observe as follows:

I. Approbate and reprobate

15. A party cannot be permitted to “blow hot-blow cold”, “fast and loose” or “approbate and reprobate”. Where one knowingly accepts the benefits of a contract, or conveyance, or of an order, he is estopped from denying the validity of, or the binding effect of such contract, or conveyance, or order upon himself. This rule is applied to ensure equity, however, it must not be applied in such a manner so as to violate the principles of what is right and of good conscience.

20. We therefore, conclude that the decision in M/s Terra (supra), by the Delhi High Court being the jurisdictional High Court of this Tribunal is binding on us and consequently, we are of the view that the appeal filed by the Appellant was barred by time and was rightly rejected by the competent authority and also for the reason for non-filing of the requisite documents in terms of Section 149 of the Customs Act as well as the Circular.

21. Appeal is, accordingly dismissed.

[Order pronounced on 18^th April 2023]