ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 03.01.2026
Punjab & Haryana High Court Upholds DFIA Conversion Under Section 149 of Customs Act
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379. β β
On February 15, 2023, the Punjab and Haryana High Court delivered a significant judgment in the case of Commissioner, Customs ICD, GRFL vs. Mrs. Bectos Food Specialities Ltd. This case revolved around the conversion of Duty Drawback shipping bills to Duty-Free Import Authorization (DFIA) Scheme, a matter that has been a subject of legal contention for years. β The judgment not only upheld the rights of exporters but also clarified the legal position regarding the time limit for such conversions under Section 149 of the Customs Act, 1962. β
Background of the Case
The respondent, Mrs. Bectos Food Specialities Ltd., is a manufacturer of biscuits and cookies, exporting goods under the Duty Drawback Scheme. β The dispute arose due to a notification dated August 1, 2013, which mandated that inputs used in the manufacture of export products under the DFIA Scheme must be imported and utilized in the export of goods. β This notification led the respondent to export goods under the Duty Drawback Scheme during the period from November 13, 2013, to November 20, 2015. β
However, the notification was later declared ultra vires by the Punjab and Haryana High Court in the case of M/s Pushpanjali Floriculture Pvt. β Ltd vs. Union of India (2016). Following this, the respondent applied for the conversion of their exports from the Duty Drawback Scheme to the DFIA Scheme. β The application was rejected by the Adjudicating Authority based on the Central Board of Excise and Customs (CBEC) Circular dated September 23, 2010, which imposed a time limit for such conversions. β The respondent then filed an appeal before the Appellate Tribunal, which ruled in their favor, allowing the conversion subject to the reversal of benefits taken under the Duty Drawback Scheme along with interest. β
Key Legal Question
The primary question before the High Court was whether the conversion of Duty Drawback shipping bills to DFIA Scheme could be allowed, especially when the application for conversion was rejected on the grounds of limitation as per the CBEC Circular. β
Courtβs Observations
The High Court referred to Section 149 of the Customs Act, 1962, which allows amendments to import/export documents at the discretion of the proper officer, provided the amendment is based on documentary evidence that existed at the time of export or import. β Importantly, the Court noted that Section 149 does not prescribe any time limit for such amendments. β
The Court also referred to the judgment of the Gujarat High Court in the case of M/s Lykis Limited vs. C.C. β Mundra and M/s Mahalaxmi Rubtech Ltd. vs. Union of India, which had attained finality. β In these cases, the Gujarat High Court held that the time limit prescribed by the CBEC Circular was merely procedural and could not override the statutory provisions of the Customs Act. β The Court emphasized that any policy or circular imposing a time limit for conversion of shipping bills is ultra vires if it contradicts the Customs Act.
Key Takeaways from the Judgment
- No Time Limit for Conversion Under Section 149: The Court reiterated that Section 149 of the Customs Act does not prescribe any time limit for the conversion of shipping bills. β Any circular or policy imposing such a limitation is not legally binding. β
- Precedents from Gujarat High Court: The Punjab and Haryana High Court relied heavily on the judgments of the Gujarat High Court, which had already ruled in favor of exporters in similar cases. β These judgments have set a precedent that time limits imposed by circulars cannot override statutory provisions. β
- Rights of Exporters: The judgment is a significant win for exporters, as it ensures that they can seek conversion of shipping bills without being restricted by arbitrary time limits set by non-statutory circulars.
- Dismissal of Appeal: The High Court dismissed the appeal filed by the Customs Department, upholding the Appellate Tribunalβs decision to allow the conversion of shipping bills from Duty Drawback Scheme to DFIA Scheme.
Implications of the Judgment
This judgment has far-reaching implications for exporters and the Customs Department. β It reinforces the principle that statutory provisions take precedence over procedural guidelines issued through circulars. β Exporters who face similar issues can now rely on this judgment to seek conversion of their shipping bills without being constrained by time limits that are not explicitly mentioned in the Customs Act. β
Moreover, the judgment highlights the importance of judicial precedents in shaping the interpretation of laws. By referring to the Gujarat High Courtβs rulings, the Punjab and Haryana High Court has ensured consistency in the application of legal principles across jurisdictions. β
Conclusion
The Punjab and Haryana High Courtβs decision in the Commissioner, Customs ICD, GRFL vs. Mrs. Bectos Food Specialities Ltd. case is a landmark ruling that upholds the rights of exporters and clarifies the legal position on the conversion of shipping bills under Section 149 of the Customs Act, 1962. β By dismissing the appeal of the Customs Department, the Court has set a precedent that will benefit exporters and ensure fair treatment under the law. This judgment is a testament to the judiciaryβs role in safeguarding the interests of businesses and ensuring that statutory provisions are not undermined by procedural guidelines.
Source: Punjab & Haryana High Court
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