2024 (5) TMI 576 - AT - Customs

Denial of benefit of Notification No.99/2011-CUS - Importation of the goods from Bangladesh - Edible oils - Contemporaneous imports​​​​​​​ - duty demand - Confiscation - Penalty - Mis-using the provisions of SAFTA (South Asian Free Trade Agreement) with an intent to illegitimately claim Customs duty exemption - ​​​​​​​syndicate of rouge importing firm - connivance with the exporter suppliers - HELD THAT - The appellant is an importer and having certain correspondence with the exporter for import of the said goods and nothing incriminating has been mentioned in the e-mails that the supplier shall inflate the value of the imported goods and there is no allegation against the appellant that they have received any kickback in other kinds from the supplier for inflating the value. It has been alleged that the appellant has exported the machine to the supplier for manufacturing of the goods in question for processing of the goods in question. We find that there is no bar in SAFTA that the appellant cannot export such machinery to a manufacturer located in Bangladesh for manufacturing of the goods in question. Therefore, on the basis of that it cannot be alleged that the appellant has violated any provisions of SAFTA under the Customs Act, 1962. It is not the case of the Revenue that the exporter in Bangladesh have not processed the goods and cleared as such to the appellant. It is a fact on record that the supplier in Bangladesh has imported crude oil form Malayasia/Indonesia and processed the same and exported to the appellant RBD Refined Palm Olein, therefore, it cannot be alleged that the supplier/exporter has not processed the goods. We further take note of the fact that it is not the case of the Revenue that the certificate issued by the exporter is not genuine or correct and the verification report given by Deputy Director, EPB, Bangladesh is not correct. The certificate of country of origin and the verification report cannot be doubted unless and until, the same is proved fake by the Revenue. No such allegation in the show cause notice that the certificate of country of origin provided by the exporter and the verification report are fake, in that circumstances, the benefit of exemption Notification cannot be denied to the appellant. Therefore, we hold that the appellant is entitled for the benefit of exemption Notification No.99/2011-CUS dated 09.11.2011, consequently, the impugned proceedings are not sustainable against the appellant. Accordingly, the same are set aside. No penalty is imposable on the appellants. Accordingly, we set aside the impugned order and allow all the appeals filed by the appellants with consequential relief.

Summary

Issues Involved:
1. Entitlement to benefit of exemption under Notification No.99/2011-CUS dated 09.11.2011.
2. Allegation of connivance between appellants and Bangladeshi suppliers.
3. Validity of the certificate of origin issued under SAFTA Rules.
4. Comparative value of goods imported directly from Malaysia/Indonesia versus those routed through Bangladesh.

Summary:

1. Entitlement to Benefit of Exemption:
The appellants challenged the denial of the benefit of Notification No.99/2011-CUS dated 09.11.2011. The issue centered on whether the appellants were entitled to customs duty exemption under SAFTA for importing RBD Palm Oil from Bangladesh. The appellants argued that the goods were processed and value-added in Bangladesh, and they had valid country of origin certificates.

2. Allegation of Connivance:
The initial allegation was that the appellants were in connivance with Bangladeshi suppliers to inflate the value of imported goods to claim undue benefits. However, the Tribunal found no incriminating evidence in the recovered documents and emails to support this allegation. The Tribunal also noted that there was no prohibition under SAFTA against exporting machinery to a manufacturer in Bangladesh for processing goods.

3. Validity of Certificate of Origin:
The Tribunal emphasized that the certificate of origin issued by the exporter and verified by the Deputy Director, EPB, Bangladesh, was genuine and correct. It was noted that the Revenue did not allege that the certificates were fake. The Tribunal cited previous decisions affirming that certificates of origin issued by designated authorities under SAFTA Rules cannot be rejected unless proven fake.

4. Comparative Value of Goods:
The Tribunal acknowledged that the value of goods imported directly from Malaysia or Indonesia was lower than those routed through Bangladesh. However, it was established that the goods were indeed processed in Bangladesh, justifying the higher value. The Tribunal concluded that the processing and subsequent export of RBD Palm Olein from Bangladesh were legitimate and in compliance with SAFTA Rules.

Conclusion:
The Tribunal held that the appellants were entitled to the benefit of exemption Notification No.99/2011-CUS dated 09.11.2011. The impugned proceedings were set aside, and no penalties were imposed on the appellants. The appeals were allowed with consequential relief.