Customs | AIFTA Exemption Cannot Be Denied Without Verifying Certificate Of Origin: CESTAT

Ajay Sharma (Judicial Member) and C J Mathew (Technical Member) noted that there is no allegation, let alone ascertainment, that the 'certificate of origin' corresponding to each of the impugned consignments is not authentic or not issued by the competent authority. There is no reasoning offered for concluding that the description of the impugned goods did not conform to the contents of the certificate or packing lists.

In this case, the assessee/appellant imported 10 consignments from Thailand between February 2018 and July 2018.

The assessee had claimed concessional duty under the ASEAN-India Free Trade Agreement (AIFTA) available for goods sourced from Thailand, by notification no. 46/2011-Cus dated 1^st June 2011, as amended by notification no. 96/2017-Cus dated 29^th December 2017.

A show-cause notice was issued to the assessee. The template of the discrepancy in the single live consignment was placed on all eleven to conclude that certification entailing eligibility for exemption was inadequate and, hence, justified the discard of submissions made on behalf of the noticees.

An appeal was filed before the Tribunal. The impugned order, notwithstanding the direction chosen to record a finding that the submission placed before the Tribunal was not the one that was before the original authority.

As per the assessee, the impugned order has grievously erred in expanding the scope of de novo adjudication by fastening a fresh detriment that was not in the order examined by the Tribunal.

It was submitted that, in the absence of a finding on the authenticity of the said documentation, denial of eligibility for exemption is not sanctioned either by the impugned notification or the process of law.

The revenue submitted that the facts relating to the live consignment bear out the irregularity in the earlier imports, too. It was argued that in an era of self-assessment, it is the responsibility of the importer to substantiate a claim for the benefit of the exemption notification.

The Tribunal opined that the first proceedings culminated in detriments that did not go beyond determining liability to confiscation, and with no consequence of redemption on payment of fine. The foray by the adjudicating authority in that direction is in breach of jurisdiction in de novo proceedings.

The bench stated that the exemption that was availed factors the situs of production of the goods, viz., one of the countries that form the ASEAN economic bloc. The goods were cleared at the relevant times on submission of certification to that effect; denial thereof, and recovery by recourse to section 28 of the Customs Act, 1962, would have to be founded on the proposition of lack of validation of such claim. There is no finding that the impugned goods did not originate in Thailand.

As per the Tribunal, all that the adjudicating authority relied upon was the discrepancy insofar as the live consignment was concerned and the alacrity with which the claim for exemption was withdrawn, albeit 'under protest', in the face of impediment to clearance as such.

The denial of exemption for earlier consignments on such fragile assumption of modus operandi does not sustain in the absence of reference, as prescribed in relevant rules, for questioning validity of the accompanying certificate and, in the absence of such ascertainment, to conclude that origin was not of Thailand. The factual matrix does not hold with the conclusions in the impugned order, added the bench.

In view of the above, the Tribunal allowed the appeal.

Case Title: Marvel Silver v. Commissioner of Customs

Case Number: CUSTOMS APPEAL NO: 86363 OF 2023

Counsel for Appellant/ Assessee: Shri Sujay Kantawala and Ms Aishwarya Kantawala

Counsel for Respondent/ Department: Shri Krishna Murari Azad, Assistant Commissioner

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