prpri Substantial benefit under MEIS scheme cannot be denied for inadvertent human error Substantial benefit under MEIS scheme cannot be denied for inadvertent human error

Case Law Details

Case Name : K.I.International Limited Vs Commissioner of Customs (Madras High Court)
Appeal Number : W.P. No. 16328 of 2020
Date of Judgement/Order : 23/06/2021
Related Assessment Year :

K.I. International Limited Vs Commissioner of Customs (Madras High Court)

The Hon’ble Madras High Court in K.I. International Ltd. v. the Commissioner of Customs (Appeal) [W.P. No. 16328 of 2020 dated June 23, 2021] set aside the order passed by the Revenue Department rejecting the claim of the assessee that disentitled the assessee from claiming the benefits under the Merchandise Export from India Scheme (MEIS Scheme) and held that, the assessee will be entitled for such benefits and the shipping bills reveal a clear intention of the assessee to avail benefit under the MEIS Scheme and directs the Revenue Department to grant consequential benefits within 8 weeks.

Facts:

K.I. International Ltd. (“the Petitioner”) seeks a direction for amendments of its shipping bills for the period February 06, 2017 to January 02, 2018 on the basis of erroneous assumption that the shipping bills contains an inadvertent error while uploading shipping bills on the Electronic Data Interface of the Customs Department (“EDI”), that disentitled the Petitioner from claiming benefit under the MEIS Scheme. The intention of the Petitioner to claim for benefit under the MEIS Scheme is set out very clearly in the shipping bills itself. The Petitioner also submitted sample copy of the shipping bill for the reference with the writ petition. But the claim by the Petitioner was rejected vide order passed by the Commissioner of Customs (Appeals) (“the Respondent”) on the ground that the word ‘No’ was reflected in the documents and as such, the Petitioner was not entitled to the benefit..

This writ petition has been filed by the Petitioner seeking quashing of order rejecting benefit under the MEIS Scheme.

Issue:

Whether the Petitioner is entitled to avail the benefit under MEIS Scheme in case of inadvertent error occurred while uploading shipping bills on EDI?

Held:

The Hon’ble Madras High Court in W.P. No. 16328 of 2020 decided on June 23, 2021 held as under:

Noted that, the Petitioner has unintentionally made an error while uploading the shipping bills on the EDI, wherein, the field requiring the word ‘yes or no’ for claiming the MEIS Scheme benefit has been erroneously filled as ‘No’ instead of ‘yes’. The error is hyper-technical, inadvertent and a human error. But the intention of the Petitioner is expressed in the shipping bills from inception.

Stated that, Section 149 of the Customs Act, 1962 (“the Customs Act”) e. ‘Amendment of documents’ is unnecessary since the shipping bills require no amendment and clearly reflect the intention of the Petitioner to claim the benefit under the MEIS Scheme.

Opined that, the Petitioner has been inspired by an order passed by this Court in a Writ Petition granting benefit in similar situations. Further, observed that, the Petitioner has filed the representation for grant of the MEIS Scheme after one year and 9 months from the last date of filing the shipping bills, but it would be too harsh to deny the benefit merely on the ground of delay.

Held that, the Petitioner is entitled to the benefit under the MEIS Scheme.

Directed the Respondent to grant consequential benefits to the Petitioner within a period of eight weeks.

Relevant Provisions:

Section 149 of the Customs Act:

“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: 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.”

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FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Heard Mr.M.A.Mudimannan, learned counsel for the petitioner and Mr.V.Sundareswaran, learned Senior Panel Counsel for the respondents.

2. The petitioner’s prayer in this case is It seeks a direction for amendment of its shipping bills for the period 06.02.2017 to 02.01.2018 on the erroneous assumption that the shipping bills contain an inadvertant error that disentitled it from claiming benefit under the Merchandise Exports from India Scheme (MEIS Scheme).

3. It is an admitted position, duly supported by the shipping bills (sample bill SB No.1887033 dated 29.12.2017 placed at page 1 of the document compilation filed in support of the Writ Petition), that the intention of the petitioner/exporter to claim benefit under the MEIS Scheme is set out very clearly in the shipping bills itself. The rejection of the claim, on the ground that the word ‘No’ is reflected in the documents and as such, the petitioner is not entitled to the benefit, is thus erroneous.

4. What has transpired is that while the shipping bills reflect the intention correctly, while uploading the bills on the Electronic Data Interface of the Customs Department (EDI), the field requiring the word ‘yes or no’ for claim of MEIS benefit has been erroneously filled as ‘No’ instead of ‘yes’. Compared as against the intention of the petitioner expressed in the shipping bills, this is clearly a technical inadvertant error.

5. Reliance on Section 149 of the Customs Act, 1962 (in short ‘Act’) dealing with ‘Amendment of documents’ is unnecessary in this case, since the shipping bills require no amendment and clearly reflect the intention of the petitioner to claim the benefit. In the petitioner’s representation dated10.2019 too, the petitioner reiterates its intention to claim reward under the MEIS Scheme, but goes on thereafter to refer to provisions of Section 149 of the Act.

6. In view of the fact that the petitioner’s intention to claim MEIS benefit is clear from the shipping bills and the mistake has only happened while uploading the bills in the EDI, the error is hyper-technical, inadvertent and a human error and should not stand in the way of the petitioner being granted the substantial benefit which it has opted for, from inception.

7. Learned counsel for the respondents points out that though the last of the shipping bills is dated 02.01.2018, the representation of the petitioner for grant of MEIS is dated 04.10.2019, one year and 9 months thereafter. According to him, the claim is thus substantially belated. However, as rightly pointed out by the learned counsel for the petitioner, this does not appear to have been a ground on which the claim of the petitioner has been rejected by either the original or the appellate authority.

8. It appears that the petitioner has been inspired by an order passed by this Court in a Writ Petition granting benefit in similar It would be too harsh to state in such circumstances, specifically in the light of the facts as noticed by me above in paragraph Nos.2 to 5 that the petitioner should be denied the benefit merely on the ground of delay. This argument is rejected.

9. In the light of the aforesaid discussion, the impugned order is set aside and the Writ Petition allowed. The petitioner is entitled to the benefit under the MEIS Scheme and the respondents are directed to grant consequential benefits to the petitioner within a period of eight (8) weeks from today. No costs.

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DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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