CIRCULAR NO. 36/2010-CUSTOMS dated 23.9.2010
Sub: Conversion of free shipping bills to export promotion scheme shipping bills
and conversion of shipping bills from one scheme to another – reg.
I am directed to invite attention to the Board’s circular
No.4/2004-Cus dated 16.01.2004 which debars conversion of free shipping bills to
Advance License/DFRC/DEPB shipping bills and allows conversion of shipping bills
from one export promotion scheme to another only where the benefit of an export
promotion scheme claimed by the exporter has been denied by the DGFT/MoC&I or
Customs due to any dispute.
2. It has been represented to the Board that the norms
for allowing conversion of shipping bills may be relaxed and the Commissioners
should be allowed to consider requests for conversion of shipping bills from
free to export promotion scheme and from one export promotion scheme to another
on a case to case basis depending on the merits of the case. It has also come to
notice of the Board that the Tribunals in a series of judgments have held that
amendment to shipping bill after export of goods is governed by the proviso to
section 149 of the Customs Act, 1962 and if the requirements of the said proviso
are satisfied, conversion of shipping bill should be allowed. The conversion of
the shipping bill from one scheme to another cannot be linked with denial of
benefit of one scheme by DGFT/MoC&I or Customs due to some dispute as no such
condition for amendment of shipping bill has been provided in section 149 of
Customs Act, 1962.
3. The issue has been re-examined in light of the above.
It is clarified that Commissioner of Customs may allow conversion of shipping
bills from schemes involving more rigorous examination to schemes involving less
rigorous examination (for example, from Advance Authorization/DFIA scheme to
Drawback/DEPB scheme) or within the schemes involving same level of examination
(for example from Drawback scheme to DEPB scheme or vice versa) irrespective of
whether the benefit of an export promotion scheme claimed by the exporter was
denied to him by DGFT/DOC or Customs due to any dispute or not. The conversion
may be permitted in accordance with the provisions of section 149 of the Customs
Act, 1962 on a case to case basis on merits provided the Commissioner of Customs
is satisfied, on the basis of documentary evidence which was in existence at the
time the goods were exported, that the goods were eligible for the export
promotion scheme to which conversion has been requested. Conversion of shipping
bills shall also be subject to conditions as may be specified by the DGFT/MOC.
The conversion may be allowed subject to the following further conditions:
a) The request for conversion is made by the exporter within three months from the date of the Let Export Order (LEO).
b) On the basis of available export documents etc., the fact of use of inputs is satisfactorily proved in the resultant export product.
c) The examination report and other endorsements made on the shipping bill/export documents prove the fact of export and the export product is clearly covered under relevant SION and or DEPB/Drawback Schedule as the case may be.
d) On the basis of S/Bill/export documents, the exporter has fulfilled all conditions of the export promotion scheme to which he is seeking conversion.
e) The exporter has not availed benefit of the export promotion scheme under which the goods were exported and no fraud/ misdeclaration /manipulation has been noticed or investigation initiated against him in respect of such exports.
4. Free shipping bills (shipping bills not filed
under any export promotion scheme) are subject to ‘nil’ examination norms.
Conversion of free shipping bills into EP scheme shipping bills (advance
authorization, DFIA, DEPB, reward schemes etc.) should not be allowed. However,
the Commissioner may allow All Industry Rate of duty drawback on goods exported
under free shipping bill, without conversion of such free shipping bill to
Drawback Scheme shipping bill, in terms of the proviso to rule 12(1) (a) of the
Customs, Central Excise and Service Tax Drawback Rules, 1995.
5. Due care may be taken while allowing conversion to
ensure that the exporter does not take benefit of both the schemes i.e. the
scheme to which conversion is sought and the scheme from which conversion is
sought. Whenever conversion of a shipping bill is allowed, the same should be
informed to DGFT so that they may also ensure that the exporter does not take
benefit of both the schemes.
6. This circular supersedes the Board circular
No.4/2004-Cus dated 16.01.2004 and the earlier circulars issued in the past on
this issue. This circular shall be applicable only to shipping bills filed on or
after the date of issuance of this circular. Till such time as EDI system is
modified to allow conversion of shipping bill in the EDI system, conversion may
be allowed manually.
7. A suitable Public Notice for information of the Trade
and Standing Order for guidance of the staff may be issued. Difficulties faced,
if any in implementation of the directions may be brought to the notice of the
Board.
Kindly acknowledge receipt of this Circular.
(Pramod Kumar)
Technical Officer (DBK)
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