CESTAT Chennai Lets Promac Convert Free Shipping Bills To Advance-Authorisation Bills Despite Delay, Citing High Court Rulings

The Appellant obtained an Advance Authorization dated 22 August 2006 to import specified items for manufacturing goods for export and exported the goods to a buyer in Sudan.

After completing its export obligation and realizing the export proceeds, it sought an Export Obligation Discharge Certificate. It then discovered that its Customs House Agents had filed Free Shipping Bills instead of Advance Authorization Shipping Bills and applied to amend the bills.

The Deputy Commissioner rejected the application; on an earlier appeal, the Tribunal remanded the matter for fresh consideration, but the Commissioner again rejected the request.

The Appellant appealed, arguing that the authorization and fulfillment of the export obligation were undisputed, that the export goods and documents had been examined or certified by Central Excise officers, and that the time limit in the relevant circular could not bar conversion.

The dispute concerned the time limit prescribed by CBEC Circular No. 04/2004-Cus. dated 16 January 2004 for seeking conversion of shipping bills; the Department also relied on the circular’s one-month limit.

The Tribunal considered High Court decisions cited by the Appellant, including Commissioner of Customs (Export), Tuticorin v. Regin Exports, Mahalaxmi Rubtech Ltd. v. Union of India, and Colossustex Private Limited and Todi Rayons Private Limited v. Union of India, as well as the coordinate Bangalore Bench’s decision in the Appellant’s own case. It held that the circular-based time limit relied on by the authorities had been held ultra vires the statute.

The Tribunal found that the Bangalore Bench had considered materially similar facts in the Appellant’s own case, including a request made beyond the period prescribed by a circular, and had allowed the appeal after considering relevant High Court decisions.

In light of that decision and the conclusion that the circular’s time limit was ultra vires, the Tribunal found no reason to take a different view. It therefore held that the Commissioner’s reliance on the time limit could not sustain rejection of the conversion request.

It set aside the impugned order and allowed the appeal.