2018 (5) TMI 1372 - AT - Customs

Mis-declaration of country of origin - import of areca nuts, commonly known as betel nuts from Sri Lankan origin - Concessional rate of duty under N/N. 26/2000-Cus dated 01.03.2000 - the main allegation of the Department is that, a few gunny bags were found having the marks Produce of Indonesia . Held that - Shri Peter Fernandez, Branch Manager, Trans Asian Shipping Services Pvt. Ltd., Cochin, the line agent for the vessel, stated in his statement that the documents were genuine pertaining to the bills of lading as per his record. Further, all import documents were routed through the supplier s bank at Colombo and his bank, UCO Bank, Parliament Street Branch (Mid Corporate Branch), New Delhi - M/s National Bureau of Plant Genetic Resources, New Delhi, vide their report dated 20.03.2015 stated that there was no evidence to prove that the samples were of Indonesian origin. In the instant case the country of origin is Sri Lanka and there is no misdeclaration filed by the assessee-Appellants, especially when all the transactions were held through the banking channel. Appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
1. Misdeclaration of country of origin for imported areca nuts.
2. Denial of concessional rate of duty under India Sri Lanka Free Trade Agreement.
3. Allegation of misdeclaration through wrong documentation.
4. Certification of country of origin by designated authorities.
5. Detention of containers without valid reasons.

Analysis:
1. The appeal was filed against the Order-in-Original denying concessional duty under India Sri Lanka Free Trade Agreement due to misdeclaration of country of origin for imported areca nuts. The Department alleged that gunny bags marked as 'Produce of Indonesia' were found during a search, leading to the denial of benefits and imposition of duty, penalty, and interest. However, the adjudicating authority acknowledged that markings on packing material alone cannot conclusively determine the country of origin, especially when laboratory tests were inconclusive. The High Court directed the provisional release of seized goods, emphasizing that reusing old gunny bags for packing is not a ground for denial of country of origin benefits.

2. Another charge was misdeclaration through wrong documentation. The Branch Manager of the line agent for the vessel confirmed the genuineness of import documents routed through the supplier's bank and UCO Bank, New Delhi. Samples were sent to various institutions for verification, with conflicting reports on the origin. While some institutions could not verify Indonesian origin, the High Commission of Sri Lanka and Worldmark Commodities Pvt. Ltd. certified the goods as of Sri Lankan origin. CESTAT, Chennai, has previously held that certification by designated authorities is conclusive evidence of country of origin.

3. The Tribunal found no evidence of misdeclaration by the appellants, especially as all transactions were conducted through the banking channel. Moreover, only a portion of containers were detained without valid reasons, indicating discrimination in the impugned order. Consequently, the Tribunal set aside the impugned order, allowing the appeal and disposing of the Misc. Application accordingly.