2025 (1) TMI 688 - AT - Customs

Classification of imported dry dates - would fall under Customs Tariff Item 9806 00 00 or CTI 08404 10 30? - origin of imported dry dates - Whether the Principal Commissioner was justified in imposing penalties upon the appellant under sections 114 A and 114 AA of the Customs Act? Whether the dry dates imported by the appellant through invoice dated 15.07.2019 and Bill of Entry dated 19.08.2019 originated from UAE or from Pakistan? - HELD THAT - There is nothing on the record to suggest that such verification as contemplated under the 2020 Rules was carried out with the concerned UAE Authorities to verify the genuineness and correctness of the certificate of origin. This issue was examined by a Division Bench of the Tribunal in M/s. Omega Packwell Pvt. Ltd. vs. Pr. Commissioner of Customs, Noida 2024 (6) TMI 455 - CESTAT ALLAHABAD , where it was held that ' It shows that the said certificate was issued after proper verification of origin of goods. Authenticity of the said certificate was never challenged by way of any enquiry from the exporting country. We further notice that phyotsanitary certificate which was issued by National Plant Protection Organization of exporting country also indicates country of origin UAE. No evidence was brought out to infer that country of origin shown in the said phytosanitary certificate was incorrect. Bags of dry dates were found, during physical verification, carrying slips on which country of origin was mentioned as UAE. Mere suspicion is not enough to discard aforesaid documents.' The facts of the present case are similar to the facts of Omega Packwell decided by the Tribunal. In the present case, the Principal Commissioner has not recorded a finding that the country of origin certificate produced by the appellant was forged and all that has been stated is that it was obtained by the appellant in collusion with the exporter by submitting incorrect documents. This finding is based purely on conjectures and surmises - The Principal Commissioner was not justified in ignoring the certificate of origin issued by the competent authority in UAE. In the absence of a finding by the competent authority that this is a fake certificate, this certificate would conclusively prove that the imported goods originated from UAE - the goods imported by the appellant originated from UAE and not from Pakistan. Whether the Principal Commissioner was justified in imposing penalties upon the appellant under sections 114 A and 114 AA of the Customs Act? - HELD THAT - Penalty under section 114 A of the Customs Act can be imposed when there is short payment of duty by reason of collusion or any willful mis-statement or suppression of facts - In the instant case, it cannot be said that the appellant had willfully mis-stated facts or suppressed facts. These are necessary ingredients for applicability of the provisions of section 114 A of the Customs Act. The statement was made by the appellant in the Bill of Entry on the basis of documents, and these documents had been examined by the proper officer and, thereafter, the goods were cleared on payment of duty. The imposition of penalty under section 114A of the Customs Act on the appellant is unjustified and is liable to be set aside. - The penalty under section 114 AA of the Customs Act could also not have been imposed upon the appellant. Section 114 AA of the Customs Act provides that if a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, then he shall be liable to a penalty not exceeding five times the value of goods. There is no evidence on the record from which it can be deduced that the appellant had intentionally made a false declaration. The declaration had been made by the appellant on the basis of documents. Nothing has been brought on record to show that the appellant was aware that the goods that were imported by the appellant were of Pakistan origin and not of UAE origin. The imposition of penalty under section 114 AA of the Customs Act is, therefore, also liable to be set aside. Conclusion - i) The goods imported by the appellant originated from UAE and not from Pakistan. ii) There is no evidence on the record from which it can be deduced that the appellant had intentionally made a false declaration. The declaration had been made by the appellant on the basis of documents. Nothing has been brought on record to show that the appellant was aware that the goods that were imported by the appellant were of Pakistan origin and not of UAE origin. The imposition of penalty under section 114 AA of the Customs Act is, therefore, also liable to be set aside. Appeal allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the imported dry dates originated from UAE or Pakistan.
Whether the extended period of limitation under section 28(4) of the Customs Act was applicable.
Whether penalties under sections 114A and 114AA of the Customs Act were justified.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Origin of Imported Goods

Relevant legal framework and precedents: The Customs Act, 1962, and the Customs (Administration of Rules of Origin) Rules, 2020, provide the framework for determining the origin of goods.
Court's interpretation and reasoning: The court emphasized the importance of the certificate of origin issued by the Ajman Chamber of Commerce, UAE, and noted that no verification request was made to the UAE authorities as per the 2020 Rules.
Key evidence and findings: The appellant submitted several documents, including a certificate of origin from UAE, while the department relied on an Export Declaration and container tracking report.
Application of law to facts: The court found that the department did not follow the procedure under the 2020 Rules to verify the certificate of origin and relied on documents with inconsistencies.
Treatment of competing arguments: The appellant argued that the certificate of origin was genuine, while the department contended that the goods originated from Pakistan based on other documents. The court sided with the appellant.
Conclusions: The court concluded that the goods originated from UAE, not Pakistan.

Issue 2: Extended Period of Limitation

Relevant legal framework and precedents: Section 28(4) of the Customs Act allows for an extended period of limitation in cases of suppression of facts.
Court's interpretation and reasoning: The court did not find it necessary to address this issue in detail due to the resolution of the first issue.
Conclusions: The court implied that the extended period was not applicable given the findings on the origin of goods.

Issue 3: Imposition of Penalties

Relevant legal framework and precedents: Sections 114A and 114AA of the Customs Act impose penalties for willful misstatement or submission of false documents.
Court's interpretation and reasoning: The court found no evidence of willful misstatement or suppression by the appellant.
Application of law to facts: The court noted that the appellant's declarations were based on genuine documents verified by customs.
Conclusions: Penalties under sections 114A and 114AA were unjustified and were set aside.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "In the absence of a finding by the competent authority that this is a fake certificate, this certificate would conclusively prove that the imported goods originated from UAE."
Core principles established: The authenticity of a certificate of origin must be verified through the proper channels as outlined in the 2020 Rules before being disregarded.
Final determinations on each issue: The court held that the goods were of UAE origin, the extended period of limitation was not applicable, and penalties under sections 114A and 114AA were unjustified.

The order dated 10.09.2021 by the Principal Commissioner was set aside, and the appeal was allowed with consequential benefits.

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