2024 (1) TMI 201 - HC - Customs

Provisional assessment of Bill of Entry - seeking consequential direction for the unconditional release of goods imported under the mentioned Bill of Entry - certificates of origin - import of goods under free trade agreement from Sri Lanka - HELD THAT - The admitted position is that the Bill of Entry was issued on 24.06.2023. As such, more than six months have lapsed since the goods were brought into India. In the counter of the respondents, at paragraph 9, there is reference to the DRI having noticed manipulation of certificates of origin by unscrupulous importers. However, there is nothing to indicate that the petitioner indulged in manipulation of the certificate of origin relating to the present Bill of Entry or any other bill of entry. It should be recognized that areca nuts have a limited shelf-life and the risk of contamination and deterioration of goods increases over time. By taking into consideration the revenue interest in ensuring that duty exemption is not availed of, except in genuine cases, and the petitioner's concern that the goods be cleared expeditiously, an appropriate balance should be struck. The first respondent is directed to conclude the verification within a maximum period of thirty days from the date of receipt of a copy of this order - Petition disposed off.

Summary

Issues Involved:
1. Challenge to conditions imposed on provisional assessment of Bill of Entry No.6570809 and seeking release of imported goods.
2. Dispute regarding the genuineness of the certificate of origin for areca nuts imported from Sri Lanka under a free trade agreement.
3. Interpretation of provisions under the Customs Act, 1962 for provisional assessment and verification of goods.

Summary:
The petitioner, an importer of areca nuts, challenged the conditions imposed on the provisional assessment of Bill of Entry No.6570809 and sought the unconditional release of the imported goods. The petitioner claimed that the goods were exempt from customs duty under the India-Sri Lanka free trade agreement, supported by a certificate of origin from the Department of Commerce, Sri Lanka. The petitioner alleged that stringent conditions were imposed due to doubts about the certificate's authenticity, leading to the filing of a writ petition.

The petitioner's counsel argued that the certificate of origin contained a QR Code, which could be verified in real time, as confirmed by the High Commission of Sri Lanka. Referring to a circular by the Central Board of Indirect Tax and Customs, it was emphasized that verification should not be mechanical, especially if goods are from the same manufacturer without modifications. Previous judgments were cited to support the petitioner's request to clear the goods without a bank guarantee.

In response, the senior standing counsel for the respondents, Directorate of Revenue Intelligence (DRI), highlighted concerns about fabricated certificates of origin for imports from Sri Lanka. Provisional assessment under the Customs Act, 1962 was justified, allowing further inquiry even with all necessary documents. The counsel pointed out provisions enabling verification and release of goods upon furnishing security for the duty difference claimed.

The Court acknowledged the need to balance revenue interests with the petitioner's request for expedited clearance of goods. It directed the respondents to conclude the verification process within thirty days, releasing goods without duty if the certificate is genuine. If verification is inconclusive, provisional release against a bond without a bank guarantee was allowed. The release of goods was made subject to approval by food safety authorities, with no costs imposed. The connected motions were closed as per the order.