CESTAT Mumbai: Shipping Bill Amendment Permitted for RoSCTL Scheme Code Correction — No Time Limit Applicable to Pre-2022 Exports
Background and Overview
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant ruling in the matter of Sigma Exports Vs Commissioner of Customs, addressing a crucial question faced by textile exporters during the transitional phase when the RoSL scheme was replaced by the RoSCTL scheme. The Tribunal set aside the rejection order passed by the Commissioner of Customs (NS-II), Jawaharlal Nehru Custom House (JNCH), Nhava Sheva, and ruled in favour of the exporter, permitting amendment of 147 Shipping Bills for conversion of the export promotion scheme code.
This ruling carries significant implications for exporters who, due to the complexity of scheme transitions, inadvertently filed Shipping Bills under an incorrect scheme code and subsequently faced denial of legitimate export incentive benefits.
Facts of the Case
The Exporter and the Goods
The appellant, M/s Sigma Exports, New Delhi, is engaged in the export of made-up textile articles — specifically 100% Organic Cotton Handloom/Power loom Cushion Covers and Organic Cotton Power loom K. Towels — classified under Chapter 63 of the Customs Tariff Act, 1975. For export of these goods, the appellant had filed 147 Shipping Bills before the jurisdictional customs authorities.
The Policy Transition: RoSL to RoSCTL
To promote textile exports and ensure zero-rating of exported goods, the Central Government had been providing rebate of State taxes and levies through the Rebate of State Levies (RoSL) scheme. However, since certain embedded taxes continued to form part of export costs, the Ministry of Textiles discontinued the RoSL scheme and introduced the Rebate of State and Central Taxes and Levies (RoSCTL) scheme vide Notification No. 14/26/2016-IT (Vol.II) dated 07.03.2019.
Under the RoSCTL scheme, exporters of garments and made-ups — including all goods falling under Chapter 61, 62, and 63 of the All Industry Rates (AIR) of Drawback Schedule — became eligible to claim rebate of both State and Central taxes and levies, in addition to benefits under the Duty Drawback Scheme. The scheme was implemented through duty credit scrips issued by the Directorate General of Foreign Trade (DGFT) on a MEIS-type platform. Corresponding procedural instructions were issued by the Drawback Division of the Ministry of Finance vide Circular No.10/2019-Customs dated 12.03.2019.
The Inadvertent Error
Prior to the introduction of RoSCTL, the appellant had been availing duty drawback benefits along with MEIS benefits using scheme code "19" (applicable to the Drawback Scheme). When the new RoSCTL scheme came into force with effect from 08.03.2019, the appellant continued to file Shipping Bills under the same scheme code "19" for exports made during the period 08.03.2019 to 07.05.2020, instead of the correct scheme code "60" applicable to the combined "Drawback & RoSCTL" scheme.
Discovery of the Error
The error came to light only when the appellant submitted export details to the DGFT on 15.01.2022 for claiming RoSCTL benefits. In response, the DGFT, vide email dated 02.02.2022, informed the appellant that the scheme codes reflected in the relevant Shipping Bills and Let Export Orders (LEOs) showed code "19" instead of the required "60", as a result of which the data from the Customs gateway ICEGATE could not be transmitted to the DGFT server for processing the RoSCTL benefit claims.
Procedural History
First Rejection — Time Bar
Upon discovering the error, the appellant applied to the jurisdictional Commissioner of Customs for amendment of the 147 Shipping Bills under Section 149 of the Customs Act, 1962, vide letters dated 29.03.2022 and 31.03.2022. The request was rejected on the ground of being time-barred under CBIC Circular No. 36/2010 dated 23.09.2010, communicated through office letter dated 09.06.2022.
Appeal Before Commissioner (Appeals) — Rejected as Not Maintainable
The appellant challenged this rejection before the Commissioner of Customs (Appeals), Mumbai-II. The appeal was rejected vide order dated 18.04.2023 on the ground that since the rejection order was passed by the Commissioner of Customs himself, an appeal against the same was not maintainable before the Commissioner (Appeals) in view of Section 128 of the Customs Act, 1962.