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CIRCULAR NO. 04 /2004-Cus.dated 16.1.2004
(Amendment to Circular Nos.6/03 -Cus. dated 28.1.2003. & 40/2003-Cus. dated
12.5.2003)
Sub : Conversion of free shipping bills into Advance License/DEPB/DFRC/Drawback
shipping bills and conversion of shipping bills from one export promotion scheme
to another - regarding.
Kind attention is invited to DOR Circular Nos.6/2003-Cus. dated
28.1.2003 and 40/2003-Cus. dated 12.5.2003 in terms of which conversion of free
shipping bills into Advance Licence/DEPB/DFRC/Drawback shipping bills and
conversion of shipping bills from one export promotion scheme to another was
permitted subject to specified conditions.
2. The issue of permitting conversion of free shipping bills into Advance
Licence/DEPB/DFRC/Drawback shipping bills was discussed in the Conference of
Chief Commissioners on Tariff & allied matters held on 25th and 26th September,
2003. The Conference felt that in cases where the exporters had filed free
shipping bills on their own, it would not be advisable to permit such
conversion.
3. The issue has been re-examined in the Board.
3.1 In so far as the facility of permitting conversion of free shipping
bill into drawback shipping bill is concerned, the same is governed by Chapter X
of the Customs Act and Customs & Central Excise Duties Drawback Rules, 1995.
Rule 12 of the Customs & Central Excise Duties Drawback Rules contain the
details of statement/declaration to be made by the exporter at the time of
export of goods for the purpose of availing drawback.
Proviso to Rule 12(1)(a) of ibid rules empowers the Commissioner to grant
exemption from observance of the provisions of Rule 12(1)(a) for the purpose of
availment of drawback. This necessarily implies that whereas the Commissioner
may grant exemption from observing any of the provisions of Rule 12(1)(a) of
ibid rules for the purpose of allowing drawback, which includes permitting
drawback against a free shipping bill, no provision exists for permitting
conversion of free shipping bill into drawback shipping bill.
In view of above, it is clarified that there is no need for allowing conversion.
However, in terms of the proviso to Rule 12(1)(a) of the Customs and Central
Excise Duties Drawback Rules 1995, the Commissioner may examine and consider
individual requests on merits and facts in terms of the aforesaid provisions.
The aforesaid relaxation shall only apply in respect of drawback claims
pertaining to All Industry Rates of drawback and it would not apply to brand
rate of duty drawback, where rate is claimed in terms of Rule 6 or Rule 7 of the
Customs & Central Excise Duties Drawback Rules.
3.2 As regards permitting conversion of free shipping bills into Advance
Licence/DEPB/DFRC shipping bills is concerned, it is true over a period of time,
with liberalization having been ushered in the Customs administration, clearance
of goods is being permitted mostly on the basis of self-declaration made by the
exporters on the shipping bills. Such self-assessment scheme necessarily casts
the responsibility on the exporter to make up his mind at the time of filing
shipping bills as to which export promotion incentive he likes to avail. With
the introduction of the system of on-line assessment, such request for
conversion at a later date creates difficulties and it is not advisable to
encourage such conversion.
It is, therefore, clarified that conversion of free shipping bills into Advance
Licence/DEPB/DFRC shipping bills should not be allowed. As regards permitting
conversion of shipping bills from one export promotion scheme to another is
concerned, it is clarified that such conversion should only be allowed where the
benefit of an export promotion scheme claimed by the exporter has been denied by
DGFT/MOC or customs due to any dispute. Such conversion may be permitted on
merits by the Commissioner on case to case basis subject to the following
conditions :
a) The request for conversion is made by the exporter within one month of the
denial/rejection of the benefit claimed.
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 Schedule as the case may be.
d) On the basis of S/Bill/export documents the exporter is fulfilling all
conditions of the Export Promotion Scheme into 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/investigation
is initiated against him in respect of such exports.
4. This Circular supersedes earlier DOR Circular Nos. 6/2003-Cus. dated
28.1.2003 and 40/2003-Cus. dated 12.5.2003 and also all other DOR Circulars
issued in the past on this issue. Conversion of shipping bills from one export
promotion scheme to another as provided in Para 3.2 above shall also be subject
to conditions as may be specified by DGFT/MOC.
5. Suitable Public Notice for Trade and Standing Order for the guidance of
customs field formations may be issued.
6. Receipt of this Circular may please be acknowledged.
Yours faithfully,
(R.K. TALAJIA)
OFFICER ON SPECIAL DUTY (DBK)
F.NO.609/176/2002-DBK