Legal principle

Where shipping bills are converted under section 149 of the Customs Act, 1962, the date of export for computing limitation under the Drawback Rules, 2017 must be deemed to be the date of conversion, not the original let export order date.

Court decision

The Tribunal set aside the impugned order of rejection and allowed the appeal by way of remand in favour of the appellant, holding that the export must be deemed to have taken place on the date of conversion of the shipping bills under section 149; the applications were directed to be placed once again before the competent authority to determine the limitation period, including ascertaining compliance with rule 7 and consideration of the ground for condonation of delay.

Facts

M/s John Deere India Pvt Ltd, a 100% export oriented unit (EOU), applied on 17 December 2020 to exit the EOU scheme for the EPCG scheme, with the final debonding order issued on 16 September 2021 after a 'no due certificate' dated 23 August 2021. Exports made during the transition (1 February 2021 to 20 September 2021) were on shipping bills endorsed for drawback under section 75 of the Customs Act, 1962 or parallel FTP schemes. The competent authority under section 149 of the Customs Act, 1962 permitted conversion of 1147 shipping bills on 20 August 2022, of 190 shipping bills on 10 October 2022 and of 2571 shipping bills on 12 October 2022. Not satisfied with the rate in the schedule, the appellant applied on 13 January 2023 for fixation of brand rate under rule 6 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 2017. The Commissioner of Customs, Pune rejected the application solely as barred by limitation, having been filed 9 months and 12 days from the respective let export order (LEO) dates as stipulated in rule 5 of the said Rules.

Key provisions

• Section 75, Customs Act, 1962 — Drawback on imported materials used in the manufacture of goods which are exported
• Section 51, Customs Act, 1962 — Clearance of goods for exportation
• Rule 7, Customs and Central Excise Duties Drawback Rules, 2017 — Cases where amount or rate of drawback determined is low
• Section 149, Customs Act, 1962 — Amendment of documents
• Section 16, Customs Act, 1962 — Date for determination of rate of duty and tariff valuation of export goods
• Rule 5, Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 — Determination of date from which the amount or rate of drawback is to come into force and the effective date for application of amount or rate of drawback
• Rule 5, Customs and Central Excise Duties Drawback Rules, 2017 — Determination of date from which the amount or rate of drawback is to come into force and the effective date for application of amount or rate of drawback
• Rule 6, Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 — Cases where amount or rate of drawback has not been ddetermined