CESTAT Ahmedabad- Amendments under Section 149 allowed without an arbitrary time limit

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad, ruled in favor of PCBL Ltd. (formerly known as Philips Carbon Black Limited) in Customs Appeal Nos. 10073 and 10074 of 2024. The case revolved around the denial of an amendment request to convert drawback scheme shipping bills to advance authorization scheme shipping bills under Section 149 of the Customs Act, 1962. The tribunal set aside the rejection of the amendment request, declaring it invalid as it was based on an ultra vires circular that had already been struck down by the Gujarat High Court.

Case Background

Appellant: PCBL Ltd. (formerly Philips Carbon Black Limited).
Respondent: Commissioner of Customs, Mundra (Kutch).
Tribunal Bench: West Zonal Bench, Ahmedabad – Court No. 3.
Legal Representatives:
- For Appellant: Shri Niraj Baheti (Chartered Accountant).
- For Respondent: Shri Sanjay Kumar (Superintendent, AR).
Judgment Date: 28.11.2024.

Key Issue: Amendment of Shipping Bills

PCBL Ltd. initially filed shipping bills under the drawback scheme.
Later, they sought to convert these shipping bills to the advance authorization scheme under Section 149 of the Customs Act, 1962.
Customs authorities rejected the request, citing a delay of more than three months from the date of the Let Export Order (LEO).
The rejection was based on CBEC Circular No. 36/2010-Cus dated 23.09.2010, which imposed a three-month limitation for such amendments.

Appellant’s Arguments

The three-month limitation was not prescribed by law, but introduced by CBEC Circular No. 36/2010-Cus.
The Gujarat High Court, in Messrs Mahalaxmi Rub Tech Limited (2021) (3) TMI 240 (Gujarat HC), had struck down this circular as ultra vires:
- Violated Article 14 & 19(1)(g) of the Indian Constitution (Right to Equality & Freedom to Practice Any Profession).
- Contradicted Section 149 of the Customs Act, 1962, which does not prescribe a time limit for amendments.
The Supreme Court upheld the Gujarat High Court ruling and dismissed the Revenue’s Special Leave Petition (SLP) in 2023 (385) ELT 99 (SC).
Since the sole ground for rejection was the three-month limitation imposed by an invalid circular, the rejection was unsustainable.

CESTAT’s Findings & Decision

The three-month restriction on amendment applications had already been struck down by the Gujarat High Court.
Reliance on CBEC Circular No. 36/2010-Cus was legally incorrect as it had been declared ultra vires.
Customs authorities erred in rejecting PCBL Ltd.’s request, as Section 149 of the Customs Act does not impose any time restriction for amendments.
Since the sole reason for rejection was the invalid circular, the order was set aside.
The appeal was allowed in favor of PCBL Ltd.

Final Judgment

CESTAT set aside the customs department’s rejection order.
PCBL Ltd.’s request for amendment of shipping bills was allowed.
No penalties or duties were imposed on the appellant.
The decision reaffirmed that amendments under Section 149 should be allowed without an arbitrary time limit.

Impact of the Judgment

For Exporters & Businesses:

Shipping bill amendments can be requested beyond three months, as no statutory law prescribes such a limit.
Customs authorities cannot arbitrarily reject amendments based on outdated circulars.
Businesses can seek amendments under Section 149 even after significant time has passed.

For Customs Authorities:

CBEC Circular No. 36/2010-Cus can no longer be used to impose a time limit on amendments.
Officials must strictly follow the Customs Act, 1962, instead of relying on outdated circulars.
Any rejections based on the three-month rule may be legally challenged and overturned.

For Legal & Trade Policy Experts:

Strengthens judicial precedence on the limitations of CBEC circulars.
Reinforces the principle that customs laws override administrative circulars.
Provides a strong legal basis for challenging wrongful customs duty impositions.

Conclusion

The CESTAT ruling in favor of PCBL Ltd. is a landmark decision that upholds the primacy of statutory customs laws over arbitrary CBEC circulars. It ensures that exporters are not unfairly penalized and that customs procedures remain fair, transparent, and legally sound. This decision serves as a critical reference point for future disputes regarding amendments of shipping bills under Section 149 of the Customs Act, 1962.

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Source: CESTAT Ahmedabad

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