2024 (2) TMI 512 - AT - Customs

Import of Apples - authenticity of the Country of Origin Certificate (COO) - Imports from South Asian countries under South Asian Free trade agreement (SAFTA) - Exemption from basic customs duty (BCD) in terms of Notification No. 99/2011 Cus dt. 09.11.2011 - period March 2014 to March 2015 - HELD THAT - So far the availability of exemption from duty under Notification No. 99/2011-Cus is concerned, we find that the Certificate of Origin has been reported to be not issued by the ACCI (prescribed authority). Further, as required under Rule 12(b)(iv) of the SAFTA Rules, the goods were not under the customs control in the country of transit. Further, as required under Article 18 of SAFTA Procedures, a through bill of lading/Airway bill has not bee produced. Thus, the Appellant is not entitled to benefit of exemption under Notification No. 99/2011-Cus. Thus, no case of fraud or forgery is made out against the Appellant/importer. Upon appreciation of evidence on record, including statements recorded during investigation of Appellant/importer and other persons, no case is made out that the Appellant/importer colluded with the exporter or its agent in fabricating or forging any document. It is further evident that the origination or import of apples from Afghanistan is corroborated also by other documents like Phytosanitary Certificates, which even mentioned route of transport, inter alia, including Dubai and Iran. Further, admittedly, Afghanistan is a landlocked country and there is no direct access with India. Further, there appears to be nothing unusual for the exporter in Afghanistan to ship the apples to Dubai for faster movement as fruits are perishable in nature. The SCN is bad for selective reliance of evidence on record. Further, we find, the Appellant/importer has imported apples under proper permit issued by the Ministry of Agriculture, Government of India, specifying the country of export as Afghanistan. These aforementioned evidences support the bonafide of Appellant/importer - the provisions of Sec 28(4) are not attracted as the conditions, precedent in the said section, are not available to Revenue like fraud, suppression, misstatement, etc., with intent to evade duty. Valuation - HELD THAT - The enhancement is bad as no differential duty was proposed on account of revaluation in the SCN. We also hold that the shipping documents at Jabel Ali port, Dubai are not the prescribed documents under the Customs Valuation Rules - Revenue has not fully relied upon the shipping bills/documents filed at Dubai port, which also mentions the country of origin as Afghanistan. Further, in some of the shipping documents the declared value at Dubai port is lesser than the declared transaction value in India. In this view of the matter also, rejection of transaction value and enhancement of value on the basis of contemporaneous import price or documents filed at Dubai is held bad. Further, no evidence has been led by Revenue, of any remittance by Appellant/importer, over and above the transaction value. Accordingly, the enhancement in the transaction value is set aside. The Appellant/importer is liable to duty as per the declared value only - all penalties imposed are set aside - the Appeal of importer Asra Enterprises is allowed in part. Appeal of Revenue is accordingly, dismissed.

Summary

Issues Involved:

1. Country of Origin Certificate (COO) authenticity and exemption eligibility under Notification No. 99/2011-Cus.
2. Compliance with SAFTA Rules and Procedures.
3. Allegations of fraud, forgery, and misdeclaration.
4. Valuation of imported goods and differential duty demand.
5. Imposition of penalties under various sections of the Customs Act.

Summary of Judgment:

1. Country of Origin Certificate (COO) authenticity and exemption eligibility:
The Assessee imported apples claiming exemption from basic customs duty under SAFTA. Upon investigation, it was found that the COO was fabricated and not issued by the Afghanistan Chamber of Commerce and Industry (ACCI). The Tribunal upheld that the Assessee is not entitled to the exemption under Notification No. 99/2011-Cus as the COO was not genuine.

2. Compliance with SAFTA Rules and Procedures:
The Tribunal noted that the goods were not under customs control in the country of transit, and the required through bill of lading/Airway bill was not produced. Therefore, the Assessee failed to comply with Rule 12(b)(iv) of the SAFTA Rules and Article 18 of SAFTA Procedures.

3. Allegations of fraud, forgery, and misdeclaration:
The Tribunal found no evidence of fraud or forgery against the Assessee. The evidence, including Phytosanitary Certificates and shipping documents, supported the Assessee's claim that the apples originated from Afghanistan. The Tribunal held that the provisions of Section 28(4) of the Customs Act, which pertain to fraud, suppression, and misstatement, were not applicable.

4. Valuation of imported goods and differential duty demand:
The Tribunal held that the enhancement of value was unjustified as no differential duty was proposed on account of revaluation in the Show Cause Notice (SCN). The declared transaction value was rejected on surmises, violating Section 14 of the Customs Act and Rule 12 of the Valuation Rules. The Tribunal set aside the reassessment of the 15 bills of entry that were already finally assessed and confirmed that the Assessee is liable to duty as per the declared value only for the five provisionally assessed bills of entry.

5. Imposition of penalties:
The Tribunal set aside all penalties imposed on the Assessee, including those under Sections 112, 114A, and 114AA of the Customs Act, as no case of fraud or misdeclaration was made out against the Assessee.

Conclusion:
The Assessee's appeal was allowed in part, and the Revenue's appeal was dismissed. The Tribunal pronounced the judgment in the open court on 08.02.2024.