2018 (1) TMI 227 - HC - Customs

Whether amendment in the Bills of Entry can be allowed even when the Certificate of Origin was issued at a later date retrospectively and was not available at the time of clearance of the Bills of Entry in contravention of the section 149 of the Customs Act 1962? Whether the certificate of origin issued retrospectively by virtue of the notification no. 187/2009-NT dated 31.12.2009 can supersede the procedure/requirement as laid down in Section 149 of Customs Act, 1962 pertaining to amendment in the bills of entry? Held that - admittedly, there is a bilateral treaty between the Republic of India and the Republic of Korea which provides for exemption of customs duty, amongst others on the goods imported by the assessee here. Then he relies on Section 25 of the Act to submit, though the goods in question were exigible to customs duty, at the same time the Central Government was competent to grant exemption from payment of customs duty on such goods, generally, either absolutely or subject to conditions that may be fulfilled either before or after clearance of imported goods for home consumption. Further, such conditions could be specified by way of notification - It has then been stated that the Central Government had in exercise of powers vested under Section 25(1) of the Act issued general exemption notification no. 151 of 2009 dated 31.12.2009. A bare perusal of the notification demonstrates that the goods specified thereunder had been made exempt from payment of duty liability subject to the importer (i.e. the assessee in this case), proving to the satisfaction of the designated custom authority that the goods in respect of which the benefit of exemption had been claimed originated from the Republic of Korea. Section 149 of the Act does clearly provide for a scheme wherein though the Bill of Entry may be amended after clearance of the goods for home consumption yet, such amendment may be made only on the basis of documentary evidence that may have been in existence at the time when the goods were so cleared and not on the basis of any document prepared thereafter. The section is thus plain and very clear in its language and does not admit of any doubt that the subject Bills of Entry once cleared against payment of duty, cannot be amended to any extent except on the strength document pre-existing from before the date of clearance of that Bill of Entry - Section 149 does not express the complete intent of the Act. Section 25 of the Act provides for exemption for payment of custom duty. Under that section, the Central Government is enabled to grant exemption from custom duty to any goods generally, either absolutely or subject to condition as may be specified in the notification. By very nature, Section 25, therefore, becomes an exception to Section 12 of the Act that creates levy of custom duty on goods that may be imported to or exported from India. While granting exemption the Central Government has the power to exempt generally any goods from payment of custom duty subject to such condition/s as may be notified. However, in view of clear language of Section 25 of the Act such condition/s may be fulfilled either before or after clearance of the goods. That being the provision of the Act itself, the consequential delegated legislation namely exemption notification and the Tariff Rules have to be read and understood consistent with this unambiguous legislative intent - In the instant case, the goods in question chiefly LCD panel were clearly exigible to payment of custom duty. Thus, but for a notification being issued by the Central Government under Section 25 of the Act the same could be cleared for home consumption only against duty payment. For that reason alone, at the time of the obtaining clearance of the subject Bills of Entry , duty payment was required to be made by the assessee. The manner of proof provided by the Tariff Rules, as discussed above, by virtue of Rule 15 read with paragraph 3(4) of Annexure-III of the Tariff Rules allows the assessee to prove this fact by obtaining the Certificate of Origin not later than one year from the date of shipment of goods. Not only that, in cases where the Certificate of Origin had been issued after seven days but upto one year from the date of shipment, the assessee is further burdened to explain the reason for the same-either being on account of involuntary errors or omissions or any other valid reasons and any other or further requirement that the revenue may claim under the Tariff Rules - Once the assessee establishes the aforesaid facts, it would be entitled to claim exemption. The stipulation of Section 149 of the Act or any other provisions incorporated under the Act or the Rules for compliance of duty payment may not stand in the way of the assessee to claim exemption under Section 25 of the Act. Appeal dismissed.

Summary

Issues Involved:
1. Whether amendment in the Bills of Entry can be allowed even when the Certificate of Origin was issued at a later date retrospectively and was not available at the time of clearance of the Bills of Entry in contravention of Section 149 of the Customs Act, 1962?
2. Whether the certificate of origin issued retrospectively by virtue of the notification no. 187/2009-NT dated 31.12.2009 can supersede the procedure/requirement as laid down in Section 149 of Customs Act, 1962 pertaining to amendment in the bills of entry?

Issue-wise Detailed Analysis:

1. Amendment in the Bills of Entry:
The court examined whether amendments to the Bills of Entry could be allowed based on Certificates of Origin issued retrospectively. The revenue argued that Section 149 of the Customs Act prohibited such amendments after goods had been cleared for home consumption if the documentary evidence did not exist at the time of clearance. The court acknowledged that Section 149 indeed restricts amendments to Bills of Entry post-clearance unless based on pre-existing documents. However, the court also recognized that Section 25 of the Act allows the Central Government to grant exemptions from customs duty, which can be subject to conditions fulfilled either before or after clearance of goods. The court concluded that Section 25 operates as an exception to the general rule under Section 149, allowing amendments based on Certificates of Origin issued retrospectively under certain conditions.

2. Certificate of Origin and Notification No. 187/2009-NT:
The court analyzed whether the retrospective issuance of Certificates of Origin as per Notification No. 187/2009-NT could override the requirements of Section 149. The court noted that the exemption notification and the Tariff Rules, framed under Section 25 and Section 5(1) of the Customs Tariff Act, 1975, provide a detailed operational certification procedure, allowing Certificates of Origin to be issued up to one year from the date of shipment under exceptional circumstances. The court held that the Tariff Rules and the exemption notification are consistent with Section 25, which permits conditions for exemption to be fulfilled post-clearance. Therefore, the retrospective issuance of Certificates of Origin is valid and does not conflict with Section 149.

Conclusion:
The court found no conflict between Section 149 and Section 25 of the Customs Act. It ruled that the assessee could amend the Bills of Entry based on Certificates of Origin issued retrospectively, provided the conditions under the Tariff Rules and the exemption notification were met. The court directed the revenue authorities to verify the authenticity of the Certificates of Origin and grant the exemption if the conditions were satisfied. The appeal by the revenue was dismissed, affirming the assessee's entitlement to the claimed exemptions.