2003 (9) TMI 604 - AT - Customs

Summary

Issues:
1. Determination of country of origin for imported goods under ITC P.N. 25/RE-98/9702 from SAARC countries.

Analysis:
The appellant imported a consignment of "betel-nuts splits" seeking clearance under ITC P.N. 25/RE-98/9702, allowing license-free imports from SAARC countries. The goods were purchased from a Sharjah trader, with the invoice and certificate of origin indicating Sri Lanka as the country of origin. Despite this, the Commissioner of Customs at Cochin confiscated the goods for lack of a certificate of origin from Sri Lankan Authorities, although acknowledging the goods' Sri Lankan origin based on the documents presented.

The appellant consistently argued that the goods were of Sri Lankan origin, emphasizing that the Bill of Lading showed direct shipment from Sri Lanka to Cochin, and the Phytosanitary Certificate from the Sri Lankan Authority confirmed the goods' origin as Sri Lanka. The appellant explained that the certificate of origin from Sharjah was obtained due to the seller's location, and the original certificate from Sri Lanka was surrendered. The appellant contended that denial of access to SAARC country goods was incorrect for a consignment established to be of Sri Lankan origin.

Upon reviewing the records and submissions, the Tribunal confirmed the country of origin as Sri Lanka for the betel-nut consignment. It was highlighted that the goods were shipped directly from Sri Lanka, and the Phytosanitary Certificate was issued by the Sri Lankan Authority. The Tribunal emphasized that determining the country of origin should not be based on the trader's location, as this could distort the arrangement among SAARC countries, especially considering commodity markets are often located at trading centers rather than production areas.

Consequently, the Tribunal set aside the confiscation of the goods and the penalty imposed, ordering the return of the amount deposited by the appellants. The appeal was allowed in favor of the appellant, affirming the established country of origin as Sri Lanka and emphasizing the importance of recognizing commercial realities in determining the origin of imported goods.