2021 (11) TMI 489 - AT - Customs

Concessional rate of duty - Benefit of South East Asia Free Trade Agreement (SAFTA) in terms of Notification No.99/2011-CUS dated 09.11.2011 - country of origin of goods - Country of Origin Certificate for the live consignment had been sent back to Bangladesh for rectification - confiscation - penalty - suppression of facts or not - HELD THAT - The Appellant was not availing any benefit in terms of the Exemption Notification and there was no occasion for confiscation of the live goods as the letter shows that the Country of Origin Certificate for these goods had been sent back to Bangladesh for rectification which was much before the DRI s intervention on 19/22 July 2017. The confiscation and subsequent redemption fine for Bill of Entry No.2321708 dated 05.07.2017 is un-warranted and cannot be sustained. Further, penalty under Section 114A of the Act cannot be sustained in respect of these consignments since there is no case of duty short paid due to collusion, willful misstatement or suppression of facts. The Country of Origin Certificates are conclusive evidence since these are issued by the Designated Committee of Bangladesh i.e. Export Promotion Bureau, and in absence of any material on record to show that these were forged or its genuineness questioned by DRI or Indian Customs, these Country of Origin Certificates should be considered as substantive and conclusive evidence - also there are no evidence on record of any overseas enquiry with the Bangladeshi supplier or confirmation with Bangladesh Customs or Bangladeshi Authority, and therefore the SAFTA Certificate cannot be unilaterally rejected. The past three Bills of Entry, the Proper Officer i.e. Assistant/Deputy Commissioner of Customs, Petrapole LCS had done value loading after due consideration and extended benefit of Exemption Notification on verification of documents like SAFTA Certificates, invoices etc. and thus there are no ingredient of collusion, willful misstatement or suppression of facts and accordingly the penalty imposed under Section 114A of the Act ibid is fit to be set aside. Appeal allowed - decided in favor of appellant.

Issues:
1. Confiscation of imported goods under Section 111(o) and imposition of penalties under various sections.
2. Allegations of incorrect data in Country of Origin certificate leading to denial of SAFTA benefit.
3. Investigation by Directorate of Revenue Intelligence (DRI) and subsequent legal proceedings.
4. Arguments regarding the validity of Country of Origin certificates and penalties imposed.
5. Dispute over penalty imposition under Sections 114A and 114AA of the Customs Act, 1962.

Issue 1: Confiscation of imported goods and penalties
The Appellants challenged the Order-in-Appeal that upheld the confiscation of imported goods under Section 111(o), redemption fine, duty demand, and penalties under Sections 114A and 114AA. The Tribunal found that the Appellant was not availing any benefit under the Exemption Notification, and there was no basis for confiscation as the Country of Origin Certificate had been sent for rectification before DRI's intervention. The Tribunal deemed the confiscation and penalties unwarranted due to lack of duty short payment through collusion or willful misstatement.

Issue 2: Incorrect data in Country of Origin certificate
The case revolved around the Appellant importing goods from Bangladesh and seeking SAFTA benefits based on incorrect data in the Country of Origin certificate. The DRI alleged discrepancies in the value of goods declared in Bangladesh compared to India, leading to detention and subsequent legal actions. The Appellants argued that they rectified the certificate before DRI's involvement, emphasizing their lack of intent to avail exemption benefits.

Issue 3: DRI investigation and legal proceedings
DRI's investigation highlighted discrepancies in past imports, alleging deliberate exclusion of non-Bangladeshi material value in the Country of Origin certificate. Statements from involved parties and examination of past Bills of Entry formed the basis of the allegations. The legal proceedings culminated in the Order-in-Original confirming the allegations, leading to the Appellants filing appeals before the Tribunal.

Issue 4: Validity of Country of Origin certificates and penalties
The Appellants argued that the Country of Origin certificates were valid and conclusive evidence, issued by the designated Bangladeshi authorities. They contended that no evidence suggested forgery or questioning of the certificates' genuineness. The Tribunal agreed, citing precedents and emphasizing the certificates' validity. The penalties under Section 114A were deemed unjustified due to the absence of collusion or willful misstatement.

Issue 5: Dispute over penalty imposition
The Appellants contested the penalties imposed under Sections 114A and 114AA. They argued that penalty imposition for cases involving Exemption Notification was improper, citing legal precedents. The Tribunal agreed, setting aside the penalties imposed on the Appellants, emphasizing the lack of evidence to justify the penalties.

In conclusion, the Tribunal allowed the Appeals filed by the Appellants, providing consequential relief as per law. The judgment highlighted the importance of valid Country of Origin certificates, absence of collusion or willful misstatement for penalty imposition, and the necessity for proper legal basis for confiscation and penalties under the Customs Act, 1962.

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