2013 (6) TMI 371 - HC - Customs

Exemption from customs duty - ATA Garnet System - Notification No. 157/90-Customs - proof of re-export of goods - held that - The Certificate of Disposition was produced as part of the record. The order of the Appellate Commissioner reveals that this was produced before that authority too, even though while rejecting the claim the document was not adverted to. To the Court, the certificate issued by the US authorities appears to be a valid proof of re-exportation of the goods against the said Carnet. It is important to note that none of the authorities which dealt with the matter disbelieved the authenticity of the Certificate of Disposition. Moreover, we also notice that the Letter of Evidence dated 24-6-2009 issued by USCIB to the petitioner clarifies that the goods had been re-exported. The findings of the respondents were therefore unjustified and unreasonable, as the Appellate Commissioner and the revisional authority failed to take into account relevant and material facts. - Decided in favor of assessee.

Summary

Issues:
Challenge to customs duty and education cess payment orders based on ATA Carnet system exemption, validity of proof of re-exportation, justification of authorities' decisions.

Analysis:
1. The writ petition contested orders by the Department of Revenue, Commissioner of Customs (Appeals), and Deputy Commissioner of Customs holding the petitioner liable for customs duty, education cess, and interest under the Customs Act, 1962. The dispute arose from the ATA Carnet system, which allows temporary duty-free importation of goods. The petitioner, as the guaranteeing association for ATA Carnet in India, was held responsible for payment when goods were not re-exported within the specified period.

2. The ATA Carnet in question, issued by a US association, was used for importing goods into India. Despite providing a "Certificate of Disposition" as proof of re-exportation, the authorities rejected it, leading to the imposition of duties. The petitioner argued that the certificate was valid under the ATA Convention, but the authorities and counsels for respondents maintained that the proof was insufficient and did not match the goods covered by the Carnet.

3. The court analyzed the evidence and noted discrepancies in the authorities' reasoning. While the authorities dismissed the Certificate of Disposition, the court found it to be a valid proof of re-exportation. The court highlighted that the certificate was not disbelieved by any authority and clarified that it pertained to the disputed Carnet. Additionally, a letter from the US association confirmed re-exportation, contradicting the authorities' findings.

4. Consequently, the court held that the decisions of the authorities were unjustified and unsustainable. The writ petition was allowed, quashing the payment demands and related orders issued by the respondents. The court ruled in favor of the petitioner, emphasizing the validity of the Certificate of Disposition and the failure of the authorities to consider crucial evidence, leading to the successful challenge of the customs duty and education cess payment orders.