One-Year Limit In 2022 Notification Inapplicable To Pre-2022 Conversion Of Shipping Bills: CESTAT Kolkata

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the one-year time limit introduced in 2022 for converting Free Shipping Bills into EPCG Shipping Bills cannot be applied to exports made before the rule came into force.

The bench of Judicial Member R. Muralidhar and Technical Member K. Anpazhakan held that the time limit under the 2022 notofication has no retrospective effect.

“Therefore, the time limit given therein cannot be applied for the cases where the exports have taken place during the earlier period,” the tribunal observed.

The case concerned Roy Global Trading Private Limited. It exported iron ore fines in February and May 2007 under three EPCG licences granted during 2006-07.

The exports were intended to fulfill its EPCG export obligation. However, the EPCG licence numbers were not mentioned in the shipping bills, and the consignments were cleared under Free Shipping Bills.

A Free Shipping Bill is an export document filed without claiming an export-promotion benefit. Roy Global sought to amend these documents into EPCG Shipping Bills so that the exports could be considered towards fulfilment of its EPCG export obligation.

Section 149 of the Customs Act permits amendment of customs documents after they have been presented. For goods that have already been exported, such an amendment must be supported by documentary evidence that existed when the goods were exported.

Roy Global applied to Customs in April 2015 to convert the Free Shipping Bills into EPCG Shipping Bills. No action was taken on the application. It submitted a reminder in August 2024. Customs rejected the request in November 2024, holding that the conversion request had to be made within one year of clearance under the 2022 notification. The Commissioner (Appeals) upheld the rejection in June 2025.

The tribunal also considered the three-month time limit under Paragraph 3(a) of CBIC Circular No. 36/2010-Cus. dated September 23, 2010. It held that this limit had been unequivocally held to be ultra vires the Customs Act, 1962. The tribunal therefore found that the three-month time limit had no application.

It then considered the one-year limit introduced through Notification No. 11/2022-Cus. (N.T.) dated February 22, 2022. The tribunal held that the limit applied from that date and had no retrospective effect. It therefore could not be applied where the exports had taken place during an earlier period.

Revenue also pointed out that the Free Shipping Bills had been cleared without physical examination. The tribunal noted that this issue had not been raised by the lower authorities when they rejected the conversion request. It nevertheless examined the issue to prevent Roy Global from being forced into another round of litigation.

The tribunal found that an export duty of ₹300 per metric tonne had been paid on the iron ore and accepted by Customs. The invoices and bank-realization statements also showed that payment for the exported iron ore had been received from the overseas importer. It held that documentary evidence corroborating the exports was available from the time of export.

The tribunal also considered earlier High court and tribunal rulings on conversion of Free Shipping Bills.

Those decisions held that substantive export benefits should not be denied because of a procedural lapse where the exporter otherwise meets the requirements of the relevant scheme. The tribunal found that this principle applied to Roy Global's case.

The tribunal further held that the rejection of the conversion request solely on the ground of time-bar was not legal. It clarified that the time limits under both the 2010 circular and the 2022 notification had no application to the Free Shipping Bills involved in the appeal.

The tribunal set aside the rejection and directed Revenue to take up all the Free Shipping Bills for conversion under the EPCG scheme.

It directed Revenue to consider the documentary evidence produced by Roy Global and complete the conversion process within eight weeks from receipt of the order.

The appeal was accordingly allowed.

For Appellant: Sukanya Roy, Consultant

For Revenue: Subrata Debnath and Sameer Chitkara, Authorized Representatives