Principal Commissioner of Customs Vs Louverline Blinds (Karnataka High Court)
Conclusion: Conversion of MEIS shipping bills to the DEPB scheme was permissible where bills not ‘free shipping bills as the scale of examination under both schemes was similar and the non-examination of goods could not be attributed to the assessee.
Held: Assessee was engaged in the manufacture of motorized curtain and blind assemblies and their accessories. For manufacturing goods meant for export, it imported various inputs under an Advance Authorization License, including ceiling brackets and curtain track belts. The license required export of the final products within 18 months without payment of import duty. Six shipping bills were filed showing intention to claim MEIS benefits instead of Advance Authorization discharge. Subsequently, assessee sought amendment/conversion of shipping bills to reflect exports under Advance Authorization/DEPB. It later requested an amendment of the shipping bills to reflect the correct scheme. Principal Commissioner rejected request citing Sec.149 of Customs Act (time limit), Circulars No.36/2010 & 6/2002, and claim that bills were “free shipping bills” not subject to examination. CESTAT allowed assessee’s appeal. Revenue challenged. It was held that assessee manufactured motorized curtain and blind assemblies, imported inputs for export, and held an Advance Authorization License. The sole issue was the conversion of shipping bills to the DEPB Scheme. Revenue had rejected the conversion request on three grounds: that the shipping bills were free shipping bills, that the request was beyond the one-year period under Section 149, and that the bills were not examined as required under the DEPB Scheme. Revenue’s claim was based on a mistaken premise, as the shipping bills were filed under the MEIS Scheme, not as free shipping bills. Circulars No.36/2010 and No.6/2002 allowed conversion of shipping bills between export promotion schemes if documentary evidence established eligibility. Assessee had used imported inputs for the exported goods, and no benefits were claimed under any other scheme. CESTAT correctly held that the conversion was from MEIS to DEPB, under which the scale of examination was similar, and the non-examination of goods could not be attributed to the assessee.
