2024 (1) TMI 901 - AT - Customs

Benefit of exemption under custom Notification No.46/2011-Cus dated 01.06.2011 and Notification No. 53/2011/ Cus dated 01.07.2011 denied - denial on the assumption that value of addition by the supplier was less than 35% - HELD THAT - Even though the appellant has made strong prima facie case on the merit but appeal can be disposed of on the threshold point of the time bar - It is found that the certificate of origin was provided by the exporting Country i.e. Malaysia. For which the appellant have no control. It is Governmental Authority of exporting country who after consideration of various aspects of value addition issued country of origin certificate. The facts behind issuance of country of origin neither the appellant are aware of the fact nor they are legally suppose to know the same. At the time of filing the Bill of Entry the appellant have to submit the documents including the country of origin certificate which the appellant have scrupulously complied. If there is doubt in the mind of customs they could have issued show cause notice within the normal period of limitation, as per proviso to Section 28 (4) of Customs Act. However, in the present case the show cause notice was issued beyond the normal period of limitation. Moreover, on the merit also there is no strict compliance of retroactive check and conclusion thereof was made by the Custom Authority. Therefore, no mala fide can be attributed to the appellant in the given facts of the present case. Therefore, we are of the considered view, that the demand is hit by the limitation. Appeal is allowed.

Summary

Issues involved: Alleged wrong availment of Country of Origin benefit, demand of differential customs duty, imposition of penalty under Customs Act, 1962, time limitation for demand of custom duty.

Summary:
1. The case involved the appellant importing Alkalised Cocoa Powder from Malaysia and claiming FTA benefits under Custom Notifications. A Show Cause Notice was issued proposing demand of differential customs duty based on the alleged wrong availment of Country of Origin benefit. The subsequent appeal against the demand of duty, interest, and penalty was rejected by the Appellate Commissioner, leading to the appeal before the Appellate Tribunal.

2. The appellant argued that the demand of Custom Duty with interest was beyond the limitation period specified under the Customs Act, 1962. They contended that the country of origin criteria specified under Customs Notification covered the imported goods, making them eligible for concessional duty. The appellant also highlighted that the customs authority did not have the power to reject the Certificate of Origin (COO) issued by the designated authority unless it was canceled by the same authority.

3. The appellant further argued that the retroactive check process was not fully complied with, and the exporting country did not invalidate the COO. They cited relevant judgments to support their position. On the other hand, the revenue department reiterated the findings of the impugned order.

4. Upon careful consideration, the Tribunal found that the appeal could be disposed of on the threshold point of the time bar. The Tribunal observed that the certificate of origin was provided by the exporting country, and the appellant had no control over it. The show cause notice was issued beyond the normal period of limitation, and there was no strict compliance with the retroactive check. Consequently, the demand was held to be hit by the limitation, and the impugned order was set aside, allowing the appeal.