2024 (2) TMI 741 - AT - Customs

Goods imported from Malaysian origin - benefit of N/N. 46/2011-Cus dated 01.06.2011, as amended - onus to prove on Department (shifting burden) - Department in the absence of cost data sought to reject the certificate of origin by issuing show cause notice - HELD THAT - In the instant case, the certificate was duly got verified through the Government to Government process and Malaysian authorities have not doubted the issuance of genuine certificate of origin nor its contents. However, the department in the absence of cost data has placed the whole burden of proof on the appellants, despite documentary evidence coming to the fore by way of certificate of origin and getting verified by the Malaysian authority. It is clear the cost data of Malaysian manufacturer having been provided or having been denied is a matter between Government to Government (G to G) and cannot be held against the appellants. Failure of Indian authorities to get more detailed verification or underlying cost data from the Malaysian Government authorities cannot be held against the appellant, who discharged the burden to claim benefit by providing the relevant prescribed document under the agreement and the Customs notification. On production of such evidence, it was for the department to discharge the onus as shifted upon it. Appeal allowed.

Summary

Issues Involved:
The issues involved in the judgment are the denial of exemption notification based on the origin of imported goods and the burden of proof on the appellant to claim the benefit.

Issue 1: Denial of Exemption Notification Based on Origin of Imported Goods

The appellant had filed Bills of Entry for clearance of imported goods declared as 'Alkalised Cocoa Powder' availing concessional rate of Customs Duty benefit based on the Country of Origin Certificate. The goods were cleared on the basis of self-assessed Bill of Entry. However, the Department sought to reject the certificate of origin due to the absence of cost data and issued a show cause notice. The lower authorities confirmed the duty, interest, and penalty. The appellant challenged the impugned order of the Commissioner (Appeals) by filing the present appeal.

Issue 2: Burden of Proof on Appellant to Claim Benefit

The appellant argued that once a relevant Certificate is issued and verified by Malaysian authorities, the benefit of exemption notification cannot be denied. The appellant relied on previous cases to support their argument. The Department, on the other hand, justified its stand based on the lower authority's order. The Tribunal considered that the certificate was duly verified through the Government-to-Government process, and Malaysian authorities did not doubt its genuineness. The Department placed the burden of proof on the appellant despite the documentary evidence of the certificate of origin being verified by Malaysian authorities. The Tribunal held that the failure of Indian authorities to obtain more detailed verification or cost data from Malaysian authorities cannot be held against the appellant, who provided the relevant prescribed documents under the agreement and Customs notification. The Tribunal found merit in the appeal and allowed it with consequential relief.

This judgment highlights the importance of proper verification of origin certificates and the burden of proof in claiming benefits under exemption notifications. The Tribunal emphasized the significance of documentary evidence and the Government-to-Government verification process in such cases.