CUS.APPEAL NOS. 8 OF 2020 AND 12 OF 2020: Commissioner of Customs, Customs House, Cochin v Kurwa Enterprises; Commissioner of Customs, Customs House, Cochin v CII Guardian International Ltd.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI TUESDAY, THE 8[TH] DAY OF NOVEMBER 2022 / 17TH KARTHIKA, 1944 ## CUS.APPEAL NO. 8 OF 2020 ## APPELLANT/S: COMMISSIONER OF CUSTOMS CUSTOM HOUSE, COCHIN 682 009. BY ADV SRI.P.R.SREEJITH, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS RESPONDENT/S: KURUWA ENTERPRISES 18/24, THOPPUMPADY, COCHIN 682 005. BY ADVS. SRI.M.BALAGOPAL SMT.R.DEVIKA (ALAPPUZHA) THIS CUSTOMS APPEAL HAVING COME UP FOR ADMISSION ON 08.11.2022, ALONG WITH Cus.Appeal.12/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **Customs Appeal Nos.8 & 12/2020** **-2-** IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI TUESDAY, THE 8[TH] DAY OF NOVEMBER 2022 / 17TH KARTHIKA, 1944 CUS.APPEAL NO. 12 OF 2020 ## APPELLANT/S: COMMISSIONER OF CUSTOMS CUSTOMS HOUSE, COCHIN-682 009. BY ADV SRI.P.R.SREEJITH, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS ## RESPONDENT/S: CII GUARDIAN INTERNATIONAL LTD. PLOT NO.16B CSEZ, KAKKANAD, COCHIN-682 037. BY ADVS.SRI.M.BALAGOPAL SMT.R.DEVIKA (ALAPPUZHA) THIS CUSTOMS APPEAL HAVING COME UP FOR ADMISSION ON 08.11.2022, ALONG WITH Cus.Appeal.8/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **Customs Appeal Nos.8 & 12/2020** **-3-** ## J U D G M E N T [Customs Appeal Nos.8/2020, 12/2020] ## S.V. Bhatti, J. We have heard Mr P R Sreejith learned Senior Standing Counsel (CBIC)/the appellant, and Mr N Balagopal learned counsel for the respondent. 2. The appeals have been heard together and disposed of by the common judgment since identical questions of law, under Section 130 of the Customs Act, 1962 (for short ‘the Act’) are raised by the Commissioner of Customs, Customs House, Cochin/the appellant herein. The Counsel appearing for the parties have treated Customs Appeal No. 12/2020 as the lead case and have made the submissions. The consideration of the controversy in Customs Appeal No. 12/2020 would cover questions raised in Customs Appeal No. 8/2020 as well. **Customs Appeal Nos.8 & 12/2020** **-4-** ## Customs Appeal No. 12/2020 3. The respondent, a Unit located at Cochin Special Economic Zone (CSEZ), exported 123 consignments of goods by filing free shipping bills between 29.10.2015 and 30.03.2016. The respondent claimed export incentive under Merchandise Export from India Scheme (MEIS). The respondent was given MEIS Scrips by the Regional Authority of DGFT. The Customs Officers stationed in the CSEZ noticed that the respondent, at the time of subject export, did not express the intent to claim MEIS Scrips. On account of not declaring the intent for MEIS Scrips, the claim was rejected. Thereafter, as per the letter dated 25.06.2017, the respondent applied to the Deputy Commissioner of Customs for incorporating endorsement of intention to claim MEIS Scrips on the shipping bills lodged by the respondent between 29.10.2015 and 30.03.2016. **Customs Appeal Nos.8 & 12/2020** **-5-** 3.1 By Annexure-2 order dated 25.10.2017, the request for amendment of expression of intent in the shipping bills already filed was rejected. The Deputy Commissioner of Customs noted that in terms of Section 149 of the Act, amendment to the shipping bill is requested after the goods have been exported; such amendment is permissible on the basis of contemporaneous documentary evidence in support of an exporter’s claim. It is further noted that the Exporter, admittedly, did not express the intent to avail MEIS Scrips. The request could not be considered from the applicable eligibility criterion and was not available to the subject shipping bills as per the Scheme. By examining the norms applicable to such scheme, the exporter did not produce documentary evidence to establish that the export promotion scheme attracted the goods covered by shipping bills lodged between 29.10.2015 and 30.03.2016. The view taken by the Deputy Commissioner of **Customs Appeal Nos.8 & 12/2020** **-6-** Customs was confirmed by the Commissioner of Customs (Appeals) vide order dated 15.03.2019 (Annexure-3). The respondent carried the order dated 15.03.2019 in appeal before the CESTAT, Regional Bench, Bangalore, and by order dated 16.09.2019, the appeal of the respondent is allowed. Hence, the appeal at the instance of Revenue. 4. The appeal has been admitted on the following substantial questions of law (a) Whether amendment of shipping bills under Section 149 of the Customs Act, 1962 be permitted without documentary evidences existed at the time of export justifying such amendment? (b) Is not Declaration of intent mandatory with effect from June 1, 2015 in terms with CBEC circular No. 14/2015 dated 20.04.2015? (c) Has not the Tribunal gone wrong in law while holding that no provision for physical examination of the cargo exported from SEZ unit under MEIS existed prior to Notification G.S.R. No. 909 (E) dated 19.09.2018? Has not the Tribunal overlooked **Customs Appeal Nos.8 & 12/2020** **-7-** Circular No. 36/2010 dated 23-09-2010 and other relevant Circulars/Notifications in this regard? (d) Has not the Tribunal gone wrong in law by allowing the appeal permitting amendment of shipping bills and allowing claim under MEIS without declaration before export? 5. Mr Sreejith, consolidating the argument for all the substantial questions of law, argues with force that the Tribunal exercised its jurisdiction in an illegal and erroneous way because any amendment to a document already filed with the Department must conform to the requirements of Section 149 of the Act. Section 149 of the Customs Act reads thus, 149. Amendment of documents.-Save as otherwise provided in sections 30 and 41, the proper officer may, in his discretion, authorise any document, after it has been presented in the custom house to be amended in such form and manner, within such time, subject to such restrictions and conditions, as may be prescribed: Provided that no amendment of a bill of entry or a shipping bill or bill of export shall be so authorised to be amended after the **Customs Appeal Nos.8 & 12/2020** **-8-** imported goods have been cleared for home consumption or deposited in a warehouse, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be.” and provides for the amendment of a document. A plain reading of Section 149 and Proviso, it is argued, does not stipulate limitation. However, the proviso stipulates the circumstances or conditions in which the discretion for amending a document already filed could be considered. Section 149, read in the company of proviso, is categorically clear that no amendment of any document shall be authorized after the imported goods have been cleared for home consumption or deposited in a warehouse or the export goods have been exported and goods have been cleared by the Revenue. In other words, the authorities under the Act are not fettered by a Rule of limitation for entertaining the amendment **-9-** **Customs Appeal Nos.8 & 12/2020** to any document filed by the Department. But, for exercising the jurisdiction, the conditions incorporated in the proviso guide the Officer. The reconciliation or physical verification is a safe measure to accept an amendment. To wit, there are circumstantial limitations for exercising discretion. Inviting our attention to the findings recorded by the Tribunal, it is argued that the Tribunal was primarily carried away by the absence of the period of limitation for moving an application for amendment of any document already filed under the Act. The findings are unavailable, for the core issue, referring to which amendment was rejected by the primary authority, has not been considered by the Tribunal. He prays for setting aside the order of the Tribunal and allow the appeals. He further argues that the request for amendment is made under Circular No.36/2010-Customs dated 23.09.2010, the Exporter cannot be allowed to file an application for amendment in terms of **-10-** **Customs Appeal Nos.8 & 12/2020** Circular No.36/2010, ignore one of the conditions stipulated for accepting the conversion application for amendment of the document, and contends that the limitation prescribed in the Circular in inapplicable. The exporter must take or refuse to take the benefit under the Circular with all the conditions imposed in this behalf. Alternatively, as the order of the Tribunal is interfered with for want of conclusive findings or comprehensive consideration, the order under appeal could be set aside and the matter remitted to the Tribunal for fresh consideration. 6. Mr Balagopal has relied on the very citations stated before the Tribunal. The Circular and the very judgments on which the exporter relies were cited before the Tribunal to sustain the order under appeal. It is argued that inapplicable Circulars are relied on, and the Exporter has made an application in accordance with the scheme available for **Customs Appeal Nos.8 & 12/2020** **-11-** submitting documents already filed with the Department. The Tribunal has followed the law laid down in a few various decisions, resulting in the following view: {paragraphs 5 and 6}: “5. On the other hand, Learned AR defended the impugned order. 6. After considering the submissions of both the parties and perusal of the material on record, I find that the appellant is working as a SEZ unit and he has exported 123 consignments of goods by filing Shipping Bills and the Regional Authority has issued MEIS scrips after satisfying that the goods were exported and proceeds were repatriated. Further, I find that when the appellant approached the Customs authorities for the registration of MEIS scrip at that time, it was found that the appellant have not declared their intention to avail the benefit of MEIS by making declaration in the Shipping Bills. Thereafter, the appellant requested for the amendment of the Shipping Bills under Section 149 of the Customs Act which was declined by both the authorities on the ground that there is delay in applying the amendment and further as per Circular No. 36/2010, examination were not conducted whereas for Export Promotion Scheme, stringent examination norms are prescribed. Further, I find that as far as examination of the **Customs Appeal Nos.8 & 12/2020** **-12-** consignment is concerned during the relevant time, there was no provision for physical examination of the cargo exported from SEZ unit under MEIS Scheme and that requirement was incorporated only on 19.09.2018 vide Notification G.S.R. No. 909 (E) dated 19.09.2018. Further, I find that the entire export took place prior to incorporation of the physical examination requirement. Further, I find that in the case of SEZ, the entire operations are under the control of Development Commissioner and the officers of the Customs posted therein and they can easily verify the entire records but the same was not done in this case. Further, I find that in view of the various decisions relied upon by the appellant cited supra, amendment of Shipping Bills for the declaration of MEIS is clearly covered in favour of the assessee. Moreover, the appellant has also produced one NOC vide which amendment of Shipping Bills was allowed on identical facts. Therefore, in view of the law laid down by various decisions cited supra, I am of the considered view that the impugned order denying the amendment of the Shipping Bills is not sustainable in law and therefore I set aside the same and direct the respondent to carry out the amendment in the Shipping Bills. The appeal is accordingly allowed.” ## 6.1 Firstly, no exception could be taken on the mode of **-13-** **Customs Appeal Nos.8 & 12/2020** consideration by the Tribunal. Secondly, the findings are pure findings of facts and do not deserve interference of this Court under Section 130 of the Act. Without prejudice to the other argument, it is stated that if the Court is convinced that the reasons recorded by the appellate authority are not satisfactory, the matter needs to be remitted instead of this Court re-examining minor and major details. 7. We have taken note of the submissions canvassed by the counsel appearing for the parties. For the order we are proposing to make and cautious of the jurisdiction of this Court under Section 130 of the Act, we are convinced a long and detailed order is not necessary. What is important is that the Tribunal did not consider each one of the conclusions recorded by the primary or appellate authority but still reversed the order. An order reversing the order of the primary or appellate authority must speak for itself, and reasons must be stated for **Customs Appeal Nos.8 & 12/2020** **-14-** reversing the findings recorded by the authorities. We have excerpted the order of the primary authority and also the Tribunal. The Tribunal reversed the findings of both the primary authority and the Commissioner of Appeals. The tests we apply are whether the conclusions of the authorities are considered and, for valid reasons, reversed on a ground not available in the circumstances that have been set out for reversing the order of the primary authority. The preponderance of judicial view on the absence of limitation on an application under Section 149 of the Act is available. We agree with the views, but in our jurisdiction, we are satisfied that there is a clear omission to consider each one of the circumstances, which weighed with the primary authority for rejecting the claim of the respondent. The Supreme Court in _Union Of India v. VKC Footsteps (India) (P) Ltd_[1] has laid down how 1 (2022) 2 SCC 603 **Customs Appeal Nos.8 & 12/2020** **-15-** ## Proviso is interpreted and understood, which reads thus: “Construing the proviso. 91. Provisos in a statute have multi-faceted personalities. As interpretational principles governing statutes have evolved, certain basic ideas have been recognised, while heeding to the text and context. Justice G.P. Singh, in his seminal text, Principles of Statutory Interpretation formulates the governing principles of interpretation which have been adopted by courts while construing a statutory proviso. The first rule of interpretation is that: "The normal function of a proviso is to except something out of the enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. As stated by Lush, J.; . ‘…. When one finds a proviso to the section, the natural presumption is that but for the proviso the enacting part of the section would have included the subjectmatter of the proviso. In the words of Lord Macmillan. ‘... The proper function of a proviso is to except and to deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case. The proviso may, as Lord Macnaghten laid down, be a qualification of the preceding enactment which is expressed in terms too general to be quite accurate. The general rule has been stated by **Customs Appeal Nos.8 & 12/2020** **-16-** Hidayatullah, 1.2, in the following words: 9…. As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment, and ordinarily, a proviso is not interpreted as stating a general rule. And in the words of Kapur. J. ...The proper function of a proviso is that it qualifies the generality of the main enactment by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main enactment...."(emphasis supplied) 92. But then these principles are subject to other principles of statutory interpretation which may supplement or even substitute the above formula. These other rules which have been categorised by Justice G.P. Singh are summarised as follows: 92.1. A proviso is not construed as excluding or adding something by implication: "Except as to cases dealt with by it. a proviso has no repercussion on the interpretation of the enacting portion of the section so as to exclude something by implication which is embraced by clear words in the enactment." 92.2. A proviso is construed in relation to the subject-matter of the statutory provision to which it is appended: "The language of a proviso even if general is normally to be construed in relation to the subject-matter covered by the section to which the proviso is appended. In other words, **Customs Appeal Nos.8 & 12/2020** **-17-** normally a proviso does not travel beyond the provision to which it is a proviso. It is a cardinal rule of interpretation", observed Bhagwati, J., "that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other. " 92.3. Where the substantive provision of a statute lacks clarity, a proviso may shed light on its true meaning: "If the enacting portion of a section is not clear, a proviso appended to it may give an indication as its true meaning. As stated by Lord Herschell : "Of course a proviso may be used to guide you in the selection of one or other of two possible constructions of the words to be found in the enactment, and shew when there is doubt about its scope, when it may reasonably admit of doubt as to its having this scope or that, which is the proper view to take of it:" 92.4. An effort should be made while construing a statute to give meaning both to the main enactment and its proviso bearing in mind that sometimes a proviso is inserted as a matter of abundant caution: "The general rule in construing an enactment containing a proviso is to construe them together without making either of them redundant or otiose. Even if the enacting part is clear effort is to be made to give some meaning to the proviso and to justify **Customs Appeal Nos.8 & 12/2020** **-18-** its necessity. But a clause or a section worded as a proviso, may not be a true proviso and may have been placed by way of abundant caution." 92.5. While ordinarily, it would be unusual to interpret the proviso as an independent enacting clause, as distinct from its main enactment, this is true only of a real proviso and the draftsperson of the statute may have intended for the proviso to be, in substance, a fresh enactment: "... To read a proviso as providing something by way of an addendum or as dealing with a subject not covered by the main enactment or as stating a general rule as distinguished from an exception or qualification is ordinarily foreign to the proper function of a proviso. However, this is only true of a real proviso. The insertion of a proviso by the draftsman has not always strictly adhered to its legitimate use and at times a section worded as a proviso may wholly or partly be in substance a fresh enactment adding to and not merely excepting something out of or qualifying what goes before." 93. Perhaps the most comprehensive and oft-cited precedent governing the interpretation of a proviso is the decision of this Court in S. Sundaram Pillai v. V.R. Pattabiraman, S. Murtaza Fazal Ali, J. speaking for a three-Judge Bench of this Court held: ‘43. ………….To sum up, a proviso may serve four different purposes: **Customs Appeal Nos.8 & 12/2020** **-19-** (1) qualifying or excepting certain provisions from the main enactment: (2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable: (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (4) it may be used merely to act as an optional addendum to the enactment with the sole object of explaining the real intendment of the statutory provision." 94. While enunciating the above principles, S. Sundaram Pillai" took note of the decision in Hiralal Rattanlal v. State of U.P. where K.S. Hegde, J... speaking for a four-Judge Bench of this Court observed that while ordinarily, a proviso is in the nature of an exception, the precedents indicate that sometimes a proviso is in the nature of a separate provision, with a life of its own. The Court held: (Hiralal Rattanlal case.. (Emphasis supplied) "22. ... Ordinarily a proviso to a section is intended to take out a part of the main section for special treatment. It is not expected to enlarge the scope of the main section. But cases have arisen in which this Court has held that despite the fact that a provision is - called a proviso, it is really at separate provision and the so **Customs Appeal Nos.8 & 12/2020** **-20-** called proviso has substantially altered the main section. In CIT v. Bipinchandra Maganlal & Co. Ltd this Court held that by the fiction in Section 10(2)(vii) second proviso read with. Section 2(6C) of the Indian Income Tax Act. 1922 what is really not income is, for the purpose of computation of assessable income, made taxable income." (Emphasis supplied) Besides the decision in CIT v. Bipinchandra Maganlal & Co. Ltd. the Court in Hiralal Rattantal adverted to the earlier decisions in State of Rajasthan v. Leela Jain and Bihta Coop. Development Cane Mktg. Union Ltd. v. Bank of Bihar.” 7.1 Proviso to Section 149 of the Act restricts the discretion of the officer by spelling out that no amendment of a Bill of Entry etc., be authorized to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse or the export goods have been exported except on the basis of documentary evidence which was in existence at the time the goods were cleared etc. Therefore, though the time limit is not a circumstance for outright rejection of an application still, the Officer or, for that **Customs Appeal Nos.8 & 12/2020** **-21-** matter, the Tribunal verifies the request for amendment on the prescription covered by the Proviso to Section 149 of the Act. We refrain from taking up further consideration on merits, as the order of remand, in view of our findings, is restricted. For the above reasons, we are satisfied that the order under appeal needs to be set aside and is set aside. The matter is remanded to the CESTAT for fresh consideration, preferably within six months from the date of receipt of a copy of the judgment. Customs Appeal 8/2020 8. The questions answered by Customs Appeal No. 12/2020 are also the questions stated and adopted for Customs Appeal No.8/2020 as well. The questions are answered by following the view taken in Customs Appeal No. 12/2020. Appeals are allowed. Questions are answered in favour of the Revenue for statistical purposes and against the Exporter. **Customs Appeal Nos.8 & 12/2020** **-22-** The matter is remitted to the Tribunal for fresh consideration, preferably within 6 months from the date of receipt of a copy of the judgment. **==> picture [83 x 145] intentionally omitted <==** **----- Start of picture text -----**<br> Sd/-<br>S.V.BHATTI<br>JUDGE<br>Sd/-<br>BASANT BALAJI<br>JUDGE<br>**----- End of picture text -----**<br> jjj **Customs Appeal Nos.8 & 12/2020** **-23-** ## APPENDIX OF CUS.APPEAL 12/2020 PETITIONER ANNEXURES ANNEXURE 1 CERTIFIED COPY OF THE FINAL ORDER NO.20719/2019 DATED 16.9.2019 IN APPEAL NO.C/20532/2019 OF CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL (CESTAT), REGIONAL BENCH, BANGALORE. ANNEXURE 2 TRUE COPY OF THE ORDER-IN-ORIGINAL DATED 20.7.2019 OF THE COMMISSIONER OF CUSTOMS, CUSTOMS HOUSE, COCHIN. ANNEXURE 3 TRUE COPY OF THE ORDER-IN-APPEAL NO.COC-CUSTOM000-APP-108-2018 DATED 15.3.2019 OF THE COMMISSIONER (APPEALS). **Customs Appeal Nos.8 & 12/2020** **-24-** ## APPENDIX OF CUS.APPEAL 8/2020 PETITIONER ANNEXURES ANNEXURE 1 CERTIFIED COPY OF COMMON FINAL ORDER NO. 2101621018/2019 DATED 19.11.2019 IN APPEAL NO. C/20930/2019 OF CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CESTAT, REGIONAL BENCH, BANGALORE. ANNEXURE 2 TRUE COPY OF THE ORDER IN ORIGINAL NO. COC CUSTOMS -OOO-COM -19/2019-20 DATED 20.7.2019 OF THE COMMISSIONER OF CUSTOMS, CUSTOMS HOUSE, COCHIN.