Order Date – 09 October 2023

Parties: Nisan Exports Vs C.C.-MUNDRA

Facts – 

• The Appellant, Nisan Exports, is engaged in process of printing on Cotton Fabrics, which were exempted from whole of duty of excise thus, it had not obtained Central Excise Registration. Almost all the production of appellant was being exported out of India.
• They obtained 13 Duty Free Import Authorisation (DFIA) scripts from the DGFT for export of said goods in 42 shipping bills. Due to adverse market conditions, it had surrendered all 13 original DFIA scripts along with EODC/Transferability letters for cancellation. 
• Appellant had applied for conversion of shipping bills from DFIA to Drawback Scheme, however the learned Commissioner rejected the conversion without any reason.

Issue –

• Whether the denial of conversion application of DFIA to Drawback scheme is without any reason?

Order –

• The Tribunal observed that from the copy of the impugned order it is clear that the rejection of conversion request dated 12.07.2023 made by the appellants has been done vide letter dated 18.01.2018 of the Commissioner of Customs without giving any reason.
• Further noticed that them since, October, 2015 despite doing exports in the year 2013-2014 and having applied for cancellation of DFIA. They have been in denial of the benefit both by the joint DGFT authority as well as Customs authorities due to lack of response or lack of proper response. 
• Commissioner could have easily considered the claim by allowing amendment under Section 149 by allowing conversion of shipping from DFIA to Duty Drawback Scheme. We also find that the denial of cancellation by Joint DGFT authorities is also unfair for such a long time, as such cancellation by DFIA and issuing of cancellation order by DGFT is a noted practice even by this Tribunal in the matter of 2014 (309) ELT 100 (Tri.-Ahm.), in the matter of M/s V.R.A COTTON MILLS PVT LTD. VS. COMMISSIONER OF CUSTOMS-JAMNAGAR.
• Hence, the rejection order is quashed and directed the lower authorities to convert DFIA Shipping Bills to Drawback Shipping Bills by following para-5 of Board’s Circular No. 36/2010-Cust dated 23.09.2010 and ensure that exporter does not take benefit of both schemes and also informed the DGFT authorities that in view of non-response to the cancellation request, same is deemed to have been granted.
• The appeal is allowed.