Gujarat High Court
M/S Tega Industries Ltd vs Chairman on 13 January, 2022
Bench: Nisha M. Thakore
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 10680 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S TEGA INDUSTRIES LTD.
Versus
CHAIRMAN
==========================================================
Appearance:
PARTH S SHAH(8375) for the Petitioner(s) No. 1,2
MR NIKUNT K RAVAL(5558) for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 13/01/2022
CAV JUDGMENT
(PER : HONOURABLE MS. JUSTICE NISHA M. THAKORE)
1. The writ applicant has approached this Court under extra or-
dinary writ jurisdiction under article 226 of the Constitution of India
and has prayed for following reliefs :
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
"a. To issue writ of mandamus and/or any other ap-
propriate writ(s) for directions to the respondents
to allow the benefit of Merchandise Export from
India Scheme ( MEIS) duty credit scrip entitle-
ment amounting to Rs. 17,95,369:00 for five
shipping bills carrying FOB value of exports
Rs.6,10,16,947:00 vide File no.37/21/090/80284/
AM17 DATED 09.06.2016 and duty credit scrip
entitlement amounting to Rs. 4,75,133.00 for
eleven shipping Bills carrying FOB value of ex-
ports Rs.1,62,29,676.00 vide File no.
37/21/090/80373/AM17 dated 28.06.2016;
b. To issue writ of mandamus and/or any other ap-
propriate writ(s) for directions to the respondents
for providing appropriate compensation as well
as interest , for delay in granting the benefit of
MEIS scheme;
c. To issue orders(s) , direction(s), writ(s) or any
other relief(s) as this Hon'ble Court deems fit and
proper in the facts and circumstances of the case
and in the interest of justice;
d. To award costs of incidental to this application be
paid by the Respondents; "
2. The facts which emerges from record are summarized as
under :
2.1 The writ applicant company is duly registered company un-
der the Companies act and is having it's registered office at
Kolkata and industrial unit at Dahej ( SEZ), Taluka : Vyara,
Bharuch.
2.2 The writ applicant had manually applied for MEIS scrip as
per Foreign Trade Policy 2015-2020, whereby claim was made for
duty credit scrip amounting to Rs. 17,95,369.00 for five shipping
bills carrying FOB value of export of Rs. 6,10,16,947.00 vide File
no. 37/21/090/80373/AM17, dated 22.07.2016.
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
2.3 The writ applicant had also manually applied for duty credit
scrip entitlement amounting to Rs. 4,75,133.0 for eleven shipping
bills carrying FOB value of exports of Rs. 1,62,29,676.0 vide file
no. 37/21/090/80373/AM17, dated 28.06.2016. In support of such
claim , the writ applicant has placed on record the invoice details of
the FOB value of exports and corresponding export entitlement.
2.4 The aforesaid claim of the writ applicant was examined by
the Joint Development Commissioner(I/C), KASEZ, Ahmedabad
and upon scrutiny of the manual application found that the said ap-
plications were not further accompanied by necessary documents
in the nature of declaration of intent and therefore, vide letter dated
21/22.07.2016 had raised Deficiency memo, with request to the
writ applicant to comply with the same.
2.5 In response to the aforesaid letter, the writ applicant company
had vide letter dated 02.09.2016, drawn attention of the Joint De-
velopment Commissioner to the Public Notice no. 40/2015, dated
9th October, 2015, whereby it has become mandatory to declare
intent to avail MEIS scheme benefits is applicable from 1 st June,
2015 and therefore only qua two shipping bills bearing no. 3278
and 3279 which are raised after 01.06.2015, such declaration is in-
advertently lefty out. It was further submitted at the time of submit-
ting shipping Bills to Customs inadvertently it was left out and hav-
ing realized such mistake, has immediately approached concern
authority to amend bills.
2.6 The writ applicant had persuade the Joint Development
Commissioner vide letters dated 04.10.2016, 06.01.2017 to con-
sider their claims. Subsequently, the Authorized Officer, Dahej
(SEZ), Dahej vide letter dated 29.09.2016 had issued No objection
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
for aforesaid shipping Bills to avail MEIS benefit permitting the writ
applicant company to treat the intend declaration in the said ship-
ping bills as 'intend to claim merchandise'. The writ applicant has
once again drawn attention of the Joint Development Commis-
sioner with aforesaid no objection certificate issued by the Autho-
rized Officer, Dahej(SEZ).
2.7 The writ applicant was therefore constrained to approached
the Policy Relaxation Committee, Director General of Foreign
Trade , Ministry of commerce and Industry with request to allow
MEIS authorisation in respect of eleven shipping Bills which in-
cludes two shipping bills after 01.06.2015. The attention of the
Committee was also drawn to the NOC dated 29.09.2016, issued
by the Authorised Officer, Dahej(SEZ). However, the said Commit-
tee rejected the claim of MEIS benefit vide email dated
15.03.2019.
2.8 Being aggrieved by the same, the writ applicant once again
approached Committee to reconsider their claim by referring to the
fact that in similar facts, MEIS benefits has been extended. The at-
tention of the Committee was also drawn to Court rulings and fur-
ther requested to provide opportunity of personal hearing, how-
ever, the Committee after providing opportunity of hearing to the
writ applicant, vide letter dated 17.12.2019, find no force in the
contention of the Firm and rejected the claim.
2.9 Under the aforesaid circumstances, the writ applicant is
before this Court claiming reliefs as sought for.
3. We have extensively heard learned Advocate Mr. Vinay
Shroff appearing with learned Advocate Mr.Parth Shah for the writ
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
applicant and Mr. Nikunt Raval, learned senior counsel appearing
for the respondent authorities.
4. The Learned Advocate Mr. Vinay Shroff has taken us
through the record and has drawn our attention to the communica-
tions of the Policy relaxation Committee by submitting that the
Committee has mechanically rejected their claim without adverting
to the fact that the declaration of intent was mandatory after
01.06.2015 and nine out of eleven shipping bills were prior in point
of time and in case of two shipping bills after 01.06.2015, the non
observance of procedural was inadvertently made, which could
have been condone, considering the beneficial scheme. It was fur-
ther argued that section 149 of the Customs act, 1962 provides for
amendment of the shipping bills on the basis of documentary evi-
dences, which has been done in view of the NOC issued by the
Authorised Officer, Dahej (SEZ). The Learned advocate for the writ
applicant has further submitted that MEIS scheme is a macro pol-
icy framed by the government of India to ensure that only the
Goods and Services are exported and not the Tax components at-
tached to it and the laudable object envisage is to promote Indian
trade to be more competitive in the International market. The MEIS
scheme provides for incentive in the form of duty credit scrip to the
exporter to compensate for his loss on payment of duties with aim
in making India's products competitive in Global market. Another
argument which is canvassed by the Learned advocate for the writ
applicant is that declaration of intent to avail MEIS scheme is
merely procedural in nature as against grant of benefits under the
scheme are in the nature of substantive rights, which cannot be
denied on procedural infractions.
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
5. The Learned Advocate for the writ applicant has further re-
lied upon various decisions of this Court as well as various High
Courts and Hon'ble Supreme Court.
a. 1991(55) ELT 437(SC) Manglore Chemicals & Fer-
tilisers Ltd. vs. Deputy Commissioner ( Para 11 to
14)
b. 1989 (39) ELT 503(SC) : Union of India vs. Suksha
International & Nutan gems and another ( Para 9)
c. 2020(371) ELT 241(Ker.) : Anu Cashews vs. Com-
missioner of Customs, Cochin
d. Special Civil Application No. 17804 of 2019 : High
Court of Gujarat in the case of M/s. Raj & Co. Vs.
Union of India ( Para 12 to 16)
e. Special Civil Application No. 15615 of 2019 : High
Court of Gujarat in the case of Oriental Carbon and
Chemicals Limited vs. Union of India ( Paras 30 to
35)
6. On the other hand, Learned standing counsel Mr.
Nikunt Raval on behalf of respondent authorities has vehemently
objected to grant any reliefs in favour of the writ applicant. Our at-
tention is drawn to the fact that no declaration was made by the
writ applicant in the shipping bills and in absence of such declara-
tion of intent, no fault can be found with the respondent authorities
for not extending the benefits of MEIS scheme. In support of his
submission, the Learned Counsel has referred to and relied upon
Chapter 3.14 and 3.15 of the Hand Book of Procedures. The
learned Counsel has further defended the decisions of the Policy
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
relaxation Committee by submitting that no person is entitled to an
exemption or relaxation as a matter of right. The learned Counsel
has tried to distinguished the judgments relied upon by the writ
applicants and has submitted that the object of the MEIS scheme
is to promote the manufacture and export of notified goods /
products. As per chapter 3.04, the exports of notified goods/
products with ITC(HS) code, to notified markets as listed in
Appendix 3B, shall be rewarded under MEIS. It was further
submitted that Appendix 3B provides lists of rates of rewards on
various notified products as per ITC(HS) code wise. The Learned
Standing counsel by referring to chapter 3.14 and 3.15 of the Hand
Book of procedures, contended that there being no declaration
made by the writ applicant for intent to availed benefit of MEIS
scheme, subsequent late submission for applying for Duty Credit
scrips is rightly not entertained by the Policy Relaxation committee.
The learned Counsel further contended that the subsequent
amendment of shipping bills by the Authorised Officer,
Dahej(SEZ), shall not in any manner create any right in favour of
the writ applicant for entitlement of benefits under scheme and
neither is binding upon the Policy Relaxation Committee , as the
Committee being independent statutory authority vested with wide
and discretionary powers. The Learned Standing Counsel has
referred to Para 22, 24 and 25 of the Judgment delivered by the
Hon'ble High Court of Delhi in the case of NOCIL LTD. Vs.
POLICY RELAXATION COMMITTEE, reported in 2018(359)
E.L.T. 31 ( Del.). It is therefore urged that what decision is taken
by the Policy Relaxation Committee is in terms of the procedure
prescribed under the Hand Book of Procedure and therefore, no
indulgence may be shown to the writ applicant.
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
7. In rejoinder, Learned Advocate Mr. Vinay Shroff for the writ
applicant had objected to the aforesaid contentions of the
respondent authorities and had submitted that the same is
erroneous in as much as that the respondent have completely ig-
nored chapter 9.02 of the Hand Book of Procedure, which
otherwise entitles them to the benefits of the scheme.
8. We have carefully heard learned advocates on both the
sides and having perused the record, the only question which
arises for our consideration is whether the respondent authorities
are justified in denying the benefits to the writ applicant, under the
MEIS scheme?
9. We have noticed that it is not in dispute that the case of the
writ applicant falls under the MEIS scheme which is meant for
promoting the export. That as per scheme, the rewards under
MEIS payable as percentage mentioned in the scheme itself can
be transferred for the payment of number of duties and taxes. It is
further not in dispute that in terms of 11 shipping Bills submitted by
the writ applicant, export of goods has taken place and the writ
applicant has place on record relevant documents to substantiate
the same. The bare perusal of the statement of MEIS benefit
(Annexure D at page no.41) reveals the shipping bills are from
period 10.04.2015 to 9.06.2015. Except for two shipping Bills
bearing no. dated 10.06.2015, the rest nine shipping bills are
within period of month of April, 2015 and prior to 01.06.2015. It is
not in dispute that it was upon issuance of Public Notice
no.40/2015-2020, dated 09.10.215, the declaration of intent to
avail MEIS scheme became mandatory with effect from
01.06.2015. Though it is the case of the writ applicant company
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
that when the writ applicant had submitted shipping bills vide
application dated 09.06.2016 and 28.06.2016, inadvertently they
failed to declared it's intention of availing benefit under MEIS
scheme was not mentioned. The writ applicant is justified in
submitting that in case of 11 shipping bills which were prior to
01.06.2015, the mandatory provision for declaring intent was not in
existence and therefore for no fault of them, the benefits can be
withhold by the respondent authorities. It is true that when shipping
bills were submitted vide File no. 37/21/090/80373/AM17, dated
28.06.2015, the mandatory provision was not in force. However,
the Court cannot ignore the fact that when the shipping bills vide
File no. 37/21/090/80284/AM17, dated 09.06.2016, were submitted
for necessary sanction, the mandatory provision of declaring
intention had come into existence by virtue of Public Notice dated
09.10.2015.
10. In similar facts, the Co-ordinate bench of this court had
occasion to deal with similar issues. It would be apt to reproduce
the relevant paras of the Order dated 08.02.2021, passed in
Special Civil Application no. 17804 of 2019, in the case of M/s Raj
and company Vs. union of India The same is as under :
"Para 8. Public Notice no. 09/ 2015-20, dated 16.05.2016
amends paragraph 3.14 in the following manner:
"Amended paragraph No.3.14: Procedure for Declaration
of Intent on EDI and Non EDI shipping bills for claiming
rewards under MEIS including export of goods through
courier or foreign post offices using e-Commerce (a) (i)
EDI Shipping Bills: Marking/ticking of "Y" (for Yes) in
"Reward" column of shipping bills against each items,
which is mandatory, would be sufficient to declare intent
to claim rewards under the scheme. In case the exporter
does not intend to claim the benefit of reward under
Chapter 3 of FTP exporter shall tick "N" (for No). Such
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
marking/ticking shall be required even for export shipment
under any of the schemes of Chapter 4 (includig
drawback), Chapter 5 or Chapter 6 of FTP (ii) Non-EDI
Shipping Bills: In the case of non-EDI Shipping Bills,
Export shipments would need the following declaration on
the Shipping Bills in order to be eligible for claiming
rewards under MEIS: "We intend to claim rewards under
Merchandise Exports From India Scheme (MEIS)". Such
declaration shall be required even for export shipments
under any of the schemes of Chapter 4 (including
drawback), Chapter 5 or Chapter 6 of FTP."
This clearly provides that marking/ticking of 'Y' in reward
column of shipping bills against each item, which is
mandatory, would be sufficient to declare intent to claim
reward under the scheme. If no reward is to be
obtained, the exporters simply will have to tick it as 'N'.
For Non-EDI shipping bills, export shipments would be
needed to follow the declaration on the shipping bills in
order to be eligible for claiming rewards under
MEIS, mentioning that the person intends to claim
rewards under the MEIS. Such declaration shall be
required even for export shipments under any of the
schemes including the drawback. This essentially was to
simplify the EDI and marking of the tick pursuant to the
Public Notice dated 08.12.2015 to be treated as
declaration of intent in case of EDI shipping bills since the
marking of tick in the appropriate tick boxes are
mandatory in EDI shipping bills.
9. It is thus made clear from both subsequent
notices that the procedure in case of the EDI has been
simplified as the whole object is to facilitate and
promote export and simplify the procedure and for
getting the benefits from the policy which has been
declared by the Union of India, both the Public Notices
shall need to be regarded.
10. Apt would be to refer to the decision of Saint
Gobain India PVT.LTD (supra) where the petitioner
was private limited company, which had approached the
competent respondents for correcting the bill of entry
under Section 149 of the Customs Act, 1962 and
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
the respondents had expressed their inability to permit
the amendment of the shipping bills. This was
necessitated as the petitioner company was at the time of
making such a request was an amalgamated company
and was entitled to the benefit under the Foreign Trade
Policy, 2015-20, which was enjoyed by the SEPR
Refractories India Ltd. and the private limited company
undergone the process of amalgamation with SEPR
Refractories India Ltd. The statement had been made for
and on behalf of the respondent there that the
petitioner had approached competent respondents for
amendment of the name and undergone the process of
amalgamation with SEPR Refractories India Ltd. from
that of SEPR to Saint Gobain India Pvt. Ltd., to
avail the benefits under the Foreign Trade Policy and the
contention raised was that after the introduction of
electronic process in shipping bills, the amendments
under Section 149 of the Customs Act,1962 cannot
be done in the EDI system as no notification can be done
in the system after the Export Order' is given. It is
stated, however, that the 3rd respondent can issue a 'No
Objection Certificate' to the petitioner for availing the
MEIS benefit and the 4th respondent before Madras High
Court was the authority to relax the policy which needed to
consider the said certificate to serve the petitioner's
purpose. The Court directed the 3rd respondent to
issue necessary 'No Objection Certificate' to the
petitioner which the petitioner was directed to produce to
the 4th respondent and seek the benefit from him
which was directed to consider such claim and
pass orders thereon expeditiously within a period of three
months.
10.1 This was also referred to in case of Pasha
International vs. Commissioner of Customs, Tuticorin
(supra) where the writ petitioner was manufacturer and
exporter of "Bags and made-ups. It intended to claim
benefit under MEIS and while filling up the shipping
bills, the Writ petitioner inadvertently opted for "No"
instead of "Yes". When the system was done manually,
the corrections can be made in view of the enabling
provision of Section 149 of the Customs Act, 1962 but
with the EDI system the correction was not done
C/SCA/10680/2020 CAV JUDGMENT DATED: 13/01/2022
and the Court held that the petitioner cannot be
allowed to suffer for an inadvertent mistake
committed by him. It referred to the decision of
Saint Gobain India PVT. LTD.(supra). The respondent
was directed to issue N.O.C. to enable the
petitioner to avail the benefit and thereafter to
consider the benefit as may be available to the
petitioner expeditiously.
11. This Court in case of Messrs Gokul Overseas (supra)
was requested to direct the respondent to allow the
benefits under the MEIS under five different
applications and to accept the amendment in
shipping bills with a declaration made by a separate
communication. The petitioner was the partnership
firm situated at Kandla Special Economic Zone
and was engaged in the manufacturing of derivatives
of Castor Oils and cleared its final product to export and
was also a certified Three Star Export House. In MEIS, it
sought to promote export of notified goods
manufactured in India. The Court referred to five different
kind of duties scrips with varying conditions
attached to their use and all these had merged into
a single scheme MEIS. For export made during April,
2015 to January, 2016 the request was made to
grant the benefit. The petitioners were requested to
allow benefits on the shipping bills where declaration
of intent was not mentioned prior to 01.06.2015
and also requested to extend the benefit of the
Public Notice dated 09.10.2015 to NonEDI shipping bills.
In this background, the Court in detail considered
the procedure for declaration of intent on EDI and
NonEDI shipping bills as provided under Chapter 3 of
the FTP 2015-20 and also referred to the decision of Delhi
High Court rendered in case of Kedia (Agencies) Pvt. Ltd.
v. Commissioner of Customs, reported in 2017 (348) ELT
634 (Del.). In case of MESSRS GOKUL OVERSEAS
(supra) the Court has held and observed thus:
"23. Chapter 3 of the Foreign Trade Policy 201520 has
introduced the Merchandise Exports From India Scheme.
The procedure for claiming benefit under the said scheme
has been provided under the Handbook of Procedure to
Foreign Trade Policy 201520. Para 3.14 thereof provides
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for the procedure for 'Declaration of Intent' on EDI and
NonEDI shipping bills for claiming benefits under the
MEIS, including export of goods through courier or foreign
post offices using eCommerce. Subclause (I) of clause (a)
thereof provides the procedure for 'declaration of intent' in
case of EDI shipping bills; and subclause (ii) of clause (b)
thereof provides the procedure for 'declaration of intent' on
any EDI shipping bills.
Para 3.14 of the Handbook of Procedure, reads as under:
"3.14 Procedure for Declaration of Intent on EDI and Non
EDI shipping bills for claiming rewards under MEIS
including export of goods through courier or foreign post
offices using eCommerce:
(a) (i) EDI Shipping Bills: Marking/ticking of "Y" (for Yes) in
"Reward" column of shipping bills against each item,
which is mandatory, would be sufficient to declare intent to
claim rewards under the scheme. In case the exporter
does not intend to claim the benefit of reward under
Chapter 3 of FTP exporter shall tick "N' (for No). Such
marking/ticking shall be required even for export
shipments under any of the schemes of Chapter 4
(including drawback), Chapter 5 or Chapter 6 of FTP.
(ii) NonEDI Shipping Bills: In the case of nonEDI Shipping
Bills, Export shipments would need the following
declaration on the Shipping Bills in order to be eligible for
claiming rewards under MEIS: "We intend to claim
rewards under Merchandise Exports From India Scheme
(MEIS)". Such declaration shall be required even for
export shipments under any of the schemes of Chapter 4
(including drawback), Chapter 5 or Chapter 6 of FTP.
(b) Whenever there is a decision during the financial year
to include any new product/goods or new markets then to
avail such rewards:
(i) For exports of such products/goods, to such markets, a
grace period of one month from the date of
notification/public notice will be allowed for making this
declaration of intent.
(ii) After the grace period of one month, all exports (of
such products/goods or to such markets) would have to
include the declaration of intent on all categories of
shipping bills.
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(iii) For exports made prior to date of notification/ public
notice of products/markets, such a declaration would not
be required since such exports would have already taken
place."
24. On a plain reading of the provisions of para 3.14 of the
Handbook of Procedure to Foreign Trade Policy 201520, it
is apparent that the 'declaration of intent', in the manner
provided for EDI shipping bills, has been made
mandatory, whereas in the case of NonEDI shipping bills,
such 'declaration of intent' is not stated to be mandatory.
The respondents, in their affidavit in reply, have stated
that the instant case is of a SEZ unit which exported the
goods under free shipping bills. All the SEZ exports come
under free shipping bills. Therefore, the mandatory
'declaration of intent' with effect from 01.06.2015 will not
be applicable in this case. Therefore, the unit has to
declare its intent for claiming benefits under the MEIS for
exports made prior to 01.06.2015, that is, for the period
between 01.04.2015 to 31.05.2015. As per the Foreign
Trade Policy/Handbook of Procedure 201520, MEIS
benefits were available to SEZ units with effect from
01.04.2015.
25. In case of EDI shipping bills, where it was mandatory
to file the 'declaration of intent' in the manner provided in
para 3.14 of the Handbook of Procedure to FTP (201520),
vide Public Notice 40/20152020 dated 9th October,2015, it
has beenprovided thus:
"2. As per para 3.14 of Hand Book of Procedure to FTP
(201520), all exporters while filling export shipments under
all categories of the shipping bills are required to declare
the following intent to claim benefit under MEIS: "We
intend to claim rewards under Merchandise Exports from
India Scheme (MEIS)". Declaration of intent is mandatory
with effect from June 1, 2015. CBEC has also issued a
circular no. 14/2015 dated April 20, 2015, which requires
mandatory declaration of intent from 1.6.2015 onwards. In
EDI generated shipping bills, exporters are required to tick
mark "Y" in case they intend to claim benefits under MEIS
and "N" in case they do not intend to claim benefit under
MEIS.
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3. In light of these circumstances and to address the
matter, in exercise of powers conferred under paragraph
1.03 of the Foreign Trade Policy (20152020) read with
reference to para 3.14 of Handbook of Procedures of FTP
201520, the Director General of Foreign Trade hereby
allows the following procedure to be followed where
exports have been made between 1.4.2015 to 31.5.2015,
and where the exporter has inadvertently marked "N" in
the "reward item box" and wishes to seek MEIS benefits:
Exporters shall submit physical copies of free shipping
bills after electronic filing Of application to RA at the time
of submission of application for MEIS rewards in these
cases. RA shall grant MEIS rewards after examination of
such shipping bills in accordance with other provisions of
FTP/HBP.
4. From 01.06.2015, only those shipping bills, which are
transmitted by Custom Authorities to DGFT, shall be
considered under MEIS.
Effect of this Public Notice:
Shipping bills, where declaration of intent 'Y' has not been
marked and 'N' has been ticked inadvertently in the
'reward item box' while filing shipping bill in Customs for
exports made between 1.4.2015 to 31.5.2015, shall be
transmitted by CBEC to DGFT."
26. Vide Public Notice No.47/20152020 dated 08.12.2015,
the procedure prescribed vide Public Notice No.40 dated
09.10.2015 has been extended beyond 31.05.2015 for the
period from 01.06.2015 to 30.09.2015.
27. From the facts and contentions noted above, it
emerges that the petitioner is not permitted conversion of
the shipping bills from free shipping bills to MEIS shipping
bills for the reason that Circular No.36/2010Customs
dated 23.09.2010 provides that conversion may be
allowed provided that request has been made within three
months from the date of the Let Export Order. The facts as
recorded hereinabove reveal that the Deputy
Commissioner of Customs, Kandla SEZ, Gandhidham
(Office of the Development Commissioner, Kandla Special
Economic Zone) has, in the context of the petitioner's
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request for amending the shipping bills to incorporate
'declaration of intent', has furnished comments on the
issue to the respondent No.6 - Assistant Commissioner
(Exports), Office of the Commissioner of Customs,
Kandla, stating that the petitioner has been regularly filing
its claim for similar goods under the MEIS for later periods
and it appears that the petitioner is otherwise eligible for
benefits under the said scheme. Therefore, in the light of
the provisions of section 149 of the Act read with the
provisions of Circular No.36/2010Customs dated
23.09.2010 and Notification No.40/2012( NT) dated
02.05.2012, the decision regarding conversion may be
taken on the basis of documentary evidence which was in
existence at the time when the goods were exported
subject to the satisfaction of the competent authority.
28. Thus, the eligibility of the petitioner to claim benefits
under the MEIS has not been doubted. The sole hurdle in
the case of the petitioner is that since the shipping bills are
free shipping bills, wherein no 'declaration of intent' has
been made, the petitioner is required to get the shipping
bills amended by incorporating the following 'declaration of
intent':"We intend to claim rewards under Merchandise
Exports From India Scheme (MEIS)".
29. In this case, the petitioner applied for the MEIS for the
exports made during the period April 2015 to January
2016, under separate applications. The said applications
were partly allowed and twenty five shipping bills were
disputed. Vide letter dated 03.08.2016, the petitioner was
informed by the respondent No.5 - Development
Commissioner, that since there is no 'declaration of intent'
on the shipping bills for claiming benefits under the MEIS,
a reference has been sent to the respondent No.3 DGFT
for a clarification whether such shipping bills (NonEDI)
prior to 01.06.2015 were eligible for benefits under the
MEIS benefits or not. Therefore, till that time, its claim will
be kept pending. Thus, the claim was kept pending by the
concerned authorities.
30. Vide letter dated 06.06.2017, the petitioner requested
the respondent No.4 - Commissioner of Customs, Kandla,
to allow benefits under the MEIS on the shipping bills in
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case the 'declaration of intent' was not mentioned on
exports made prior to 01.06.2015, whereupon the
petitioner was advised/informed to comply with the
amendment in the form of conversion of shipping bills from
free to MEIS, whereafter,the petitioner applied for
conversion of shipping bill.
31. Subsequently, vide communication dated
18/19.07.2017, the petitioner was informed that the
shipping bills are required to be amended by the
competent authority under section 149 of the Act and was
requested to approach the proper officer of Customs
under section 149 of the Act, whereupon the petitioner, on
01.08.2017, requested the competent authority to amend
the shipping bills under section 149 of the Act at the
earliest.
32. Thus, the respondents had not informed the petitioner
immediately to get the shipping bills converted into one
under the MEIS. It was only after a lot of inter se
communication, that the petitioner was advised to get the
shipping bills amended and converted to MEIS shipping
bills. Upon the petitioner making such application for
amendment, after prolonged inter se communications
between the respondents as to who had the jurisdiction to
decide said application, the same came to be turned down
on the ground that the application for amendment had
been made beyond three months as stipulated in Circular
36/2010Customs dated 23rd September, 2010.
33. Circular 36/2010Customs dated 23rd September,
2010 provides for conversion of free shipping bills to
Advance Authorisation/DEPB/Drawback shipping bills and
from one export promotion scheme to another. Clause (a)
of paragraph 3 thereof provides that the conversion may
be allowed subject to the conditions laid down thereunder.
Condition (a) thereof reads thus: "Request for conversion
is made by the exporter within three months of the date of
the Let Export Order (LEO)". From paragraph 4 of the
circular, the reason for providing such time limit appears to
be that free shipping bills (shipping bills not filed under any
export promotion scheme) are subject to 'nil' examination
norms.
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34. In the facts of the present case, as noticed earlier, it is
not the case of the respondents that the petitioner is not
otherwise covered by Circular No.36/2010Customs dated
23.09.2010. The sole ground on which the application has
been rejected is for non compliance of condition (a) of
paragraph 3 of the said circular, namely that the
application has been filed beyond a period of three
months from the date of filing the Let Export Order.
35. At this juncture, it may be apposite to refer to the
decision of the Delhi High Court in Kedia (Agencies) Pvt.
Ltd. v. Commissioner of Customs, 2017 (348) ELT 634
(Del.), on which reliance has been placed by the learned
advocate for the petitioner, wherein the question that
arose for consideration was: "Did the CESTAT fall into
error in upholding the denial of the petitioner's claim for
amendment of its shipping document under section 149 of
the Customs Act." The court held thus:
"7. In the present case, the appellant had been
consistently dealing with the same goods and exporting
them previously for over three years. The precondition of a
declaration along with the relative forms, for grant of
benefit was introduced on 142008 through an amendment
to the Handbook of Procedures. It is now settled law that
the provisions of the Foreign Trade (Development &
Regulation) Act, 1992, the rules or regulations framed
thereunder and the export import policy have the force of
law. Handbook of Procedures and the amendments
carried out thereto are per se not declaration of law but
only impose conditions which are to be fulfilled and
otherwise conform to the requirements of law. Without
making a deeper analysis of these legal provisions, the
facts of this case reveal that the export goods are
essentially agricultural produce and continued to be
covered as an item eligible for benefit. At the time, just
prior to 142008, the goods had been exported as free
shipping bills. The exporter/appellant's fault here is that it
did not file the requisite declaration. In all other respects,
I.e. as to whether they conform to the description in the
shipping documents and the value, etc. continues to be
ascertainable because the concerned bills, invoices and
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other shipping documents are available with the customs
authorities.
8. Having regard to these, we are of the opinion that in the
peculiar circumstances of the case, the omission to file the
declaration of the kind we are concerned with, when all
other relative materials are present was not vital to the
appellant's case. The material which did and does exist is
substantial; the appellant should, therefore, be permitted
to amend its shipping bill. The respondents are directed to
give effect to this order within the next two months. The
appeal is consequently allowed."
36. In the opinion of this court, the above decision would
be squarely applicable to the facts of the present case. As
is evident from the letter dated 07/08.09.2019 (AnnexureO
to the petition), the Deputy Commissioner of Customs,
Kandla SEZ, Gandhidham (Office of the Development
Commissioner, Kandla Special Economic Zone) has, in
the context of the petitioner's request for amendment in
the shipping bills to incorporate 'declaration of intent',
furnished comments for specific recommendations on the
issue to respondent No.6 - Assistant Commissioner
(Exports), Office of the Commissioner of Customs,
Kandla, stating that the petitioner is filing regularly its
claim for similar goods under MEIS for later periods and it
appears that the petitioner is, otherwise, eligible for the
said scheme. Therefore, in the light of the provisions of
section 149 of the Act read with the provisions of Circular
No.36/2010Customs dated 23.09.2010 and Notification
No.40/2012( NT) dated 02.05.2012, the decision regarding
conversion may be taken on the basis of documentary
evidence which was in existence at the time when the
goods were exported, subject to the satisfaction of the
competent authority.
37. Thus, except for the fact that the request for
conversion of the free shipping bill to MEIS shipping bill
has been made beyond the time prescribed in Circular
No.36/2010Customs dated 23.09.2010, no other objection
has been raised on behalf of the respondents. In the
opinion of this court, having regard to the peculiar facts of
the present case, the omission to file 'declaration of intent'
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when all other relevant material is available, is not fatal to
the petitioner's case. As in the case of Kedia (Agencies)
Pvt. Ltd. v. Commissioner of Customs (supra), in the facts
of the present case also, in all other respects, that is, as to
whether the goods conform to the description in the
shipping documents and the value, etc. continues to be
ascertainable because the concerned bills, invoices and
other shipping documents are available with the customs
authorities. The respondents are, therefore, not justified in
turning down the request to convert the shipping bills of
the petitioner from free to MEIS and thereby depriving the
petitioner of the benefits under the MEIS in respect of
exports made under such shipping bills.
38. In the light of the above discussion, the petition
succeeds and is, accordingly, allowed. The impugned
letter dated 11.02.2019 of the respondent No.2, Under
Secretary,Government of India, is hereby quashed and set
aside. The respondents are directed to permit the
petitioner to convert the shipping bills in question from free
shipping bills to MEIS shipping bills subject to the
satisfaction of the competent authority. The respondents
shall give effect to this order within two months from the
date of receipt of copy of this order. Rule is made absolute
accordingly, with no order as to costs."
12. The Court thus had recognised the fact that the
eligibility of the petitioner to claim benefits under
the MEIS scheme has not been questioned. The
only hurdle was that the shipping bills were free shipping
bills and there was nodeclaration of intent made. The
petitioner needed to get the shipping bills amended
by incorporating the declaration of intent as
provided under the MEIS and it had taken aid of various
circulars to allow that petition.
13. In the instant case, as noted hereinabove,
there is no doubt with regard to the
exportshaving been made under the FTP 201520
where, initially, Sri Lanka was not one of the countries
where such reward was available on export to the said
country. The petitioner has already exported its product
'vitrified tiles' to Sri Lanka and 73 shipping bills have also
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been produced before the respondent authorities. What
has been pleaded all through out by the petitioner is
of lack of knowledge of subsequent public notices which
had included Sri Lanka as a country for seeking the
reward under the MEIS and entire procedure having been
simplified, instead of getting the declaration
produced for the purpose of thereward, the ticking
of N/Y would suffice in case of the EDI. The ticking
itself had been made equivalent to such declaration. It
is quite clear that for the purpose of the reward, the EDI
has been simplified more particularly, by way of the Public
Notice No.9 of 2015 dated 16.05.2016 and the marking of
tick in pursuance of the earlier Public Notice No.47
dated 08.12.2015 had been treated as a declaration of
intent in case of EDI shipping bills.
14. What we notice is that in case of Messrs
Gokul Overseas (supra) even the conversion has
been permitted by the Court, whereas in the
instant case, it is only the question of the EDI bills where
inadvertently instead of 'Yes' the ticking was on 'N'.
As provided in case of Pasha International vs.
Commissioner of Customs (supra) by Madras High Court,
this has to be construed as pure and simple mistake
on the part of the exporter, when otherwise the
respondent has not questioned any of the shipping
bills and it is only because the declaration of
intent on the said shipping bills for claiming the
benefits under the MEIS, the subsequent claim made by
him on the EDI is questioned on the ground that Section
149 of the Customs Act would not be applicable.
15. We are of the opinion that the decisions
which have been discussed hereinabove coupled
with the very object of the MEIS would not allow us to
endorse to the stand taken by the respondent
authority, even if, the subsequent notices, which
have been relied upon for denying the benefits by virtue of
the communication dated 10.06.2019 do not prescribe the
time limit, the reasonable time could be regarded as this
request is made at the end of one year.
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16. We also agree with the submissions made by
the learned advocate for the petitioner that Section
149 of the Customs Act, 1962 which has been taken
recourse to by the petitioner does not prescribe any time
limit. It is a discretion of the concerned officer, which
can authorize any document after it has been
presented in the Custom House to be amended. Of
course, this has not to be amended after once the
imported goods have been cleared for the home
consumption and deposited in the warehouse where
export goods have been exported, except on the
basis of the documentary evidences, which are in
existence at the time of the clearance, deposit or the
export of the goods, as the case may be. In the electronic
age, all procedures have been simplified and the EDI is
essentially keeping pace with the electronic age. The
simplification of this process shall have to be viewed for
the benefit of the exporters for whose benefit the
scheme has been brought by the Centre as availment of
benefits is in no manner going to have any bearing
adversely on the exchequer; And, even otherwise,
it is essentially to avail the exporter the benefits
prescribed under the MEIS that the request has
been sent by the petitioner to make the same available to
it. Therefore, it is also expected of the respondent
authority to adopt an approach, giving progressive
interpretation to all these provisions and the policy
decisions rather than having conventional outlook.
17. We also cannot overlook a noticeable fact in this
communication where there is a specific reference
of the decision of the High Court of Madras and the
approach which has been adopted by the
authority. It has chosen to state that, it is
mandamus in nature and case specific, without
realising that the decision shall have to be
applied to the facts of every case by reading the ratio and
once the facts are similar, application of ratio is the
discipline expected of all concerned.
11. In view of the aforesaid pronouncement, the Court finds that
the eligibility of the writ applicant to claim benefit under MEIS
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Scheme has not been questioned. The only hurdle, which is
coming in the way of the writ applicant is that the shipping bills at
the relevant point of time were submitted as free shipping bills as
there was no declaration of intent. The petitioner in the case of
M/s. Raj & Company had approached this Court at the stage of
invoking writ jurisdiction under Article 226 of the Constitution of
India seeking direction to the respondent Authorities for issuance
of "No Objection Certificate" to the amended shipping bills by
incorporating declaration of intent in order to avail the benefits
under the MEIS Scheme. In the facts of the case on hand, the
Authorized Officer, Dahej, SEZ has not only permitted the
amendment of the shipping bills as reflected in NOC dated
29.09.2016 produced at page no. 52, to incorporate the declaration
of intent in the shipping bills but has further permitted the writ
applicant to treat the same as 'intend to claim Merchandise' . It is
quite clear from the public notice No.09/2015 dated 16.05.2015
referred in the case of M/s. Raj & Co. (Supra), the EDI has been
simplified for the purpose of reward. Further, we notice that in the
case of M/s. Gokul Overseas (supra), even the conversion has
been permitted by the Court whereas in the instant case, the
question of EDI inadvertently not incorporating the declaration of
intent of availing the benefits under MEIS Scheme is under
consideration. In the case of Pasa International Vs. Commissioner
(Supra), the Madras High Court has construed the same to be
pure and simple mistake on the part of the exporter when
otherwise the respondent Authorities had not questioned any of
the shipping bills and it is only because of absence of declaration
of intent on the said shipping bills for claiming benefits under the
MEIS scheme has not been referred.
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12. In light of the aforesaid judicial pronouncements coupled with
the very object of the MEIS as well as undisputed facts, we allow
this petition and direct the respondent Authorities to extend the
benefits prescribed under the MEIS scheme. Let such exercise be
completed preferably within a period of 8 weeks from the date of
receipt of copy of this order. Petition is allowed accordingly.
(SONIA GOKANI, J)
(NISHA M. THAKORE,J)
Y.N. VYAS
