2016 (10) TMI 267 - HC - Customs

Genuineness of the certificate of origin of goods - country of origin of the goods - Malaysia or China? - The question, as to whether the first respondent was justified in disbelieving, or ignoring the certificate issued by the Malay Chamber of Commerce, and if he had to disbelieve the same, whether the Operational Certification Procedure had to be adhered to, and whether the first respondent could have issued the show cause notice for all the seven containers, when even as per the averment made in the notice states that only three containers have originated from China, are all factual issues, which have to be agitated before the Authority. Held that - Nevertheless, if the importer raises the issue relating to the genuineness of the certificate and the validity and its efficacy, by way of filing reply to the show cause notice, then, it goes without saying that the Adjudicating Authority should consider that issue as first issue, because, it has an effect on the entire adjudication. Assuming that the Authority is satisfied with the certificate produced by the petitioner, then the Authority need not proceed further with the other proposals in the show cause notice. Requirement of adherence with the Operational Certification Procedures - Held that - All the issues, raised by the petitioner, can very well be agitated by way of reply to the show cause notice, and the Court will be inclined to direct the Adjudicating Authority to consider the issues raised by the petitioner. Petition disposed off.

Summary

Issues involved:
Challenge to show cause notice under Section 28 & 124 of the Customs Act, 1962 regarding the country of origin of imported goods (PVC Flex Banners), proposed anti-dumping duty, value redetermination, confiscation of goods, and penalty.

Analysis:
The petitioner contested the show cause notice issued by the first respondent challenging the proposed rejection of the country of origin as 'Malaysia' and suggesting 'China' instead. The petitioner presented documents from the Malay Chamber of Commerce, Malaysia, certifying the Malaysian origin of the goods. The petitioner argued that the certificates attested by the Malaysian Embassy in India should be considered genuine, and the show cause notice should not have been issued based on the alleged origin discrepancy.

The petitioner also raised concerns about the procedural aspects, pointing out the Operational Certification Procedure that should have been followed before rejecting the importer's certificate. The petitioner emphasized that without adhering to the prescribed guidelines, the issuance of the show cause notice would be premature. Additionally, the petitioner disputed the reasoning behind disbelieving the certificates, stating that the mere origin of three out of seven containers from China should not lead to the blanket assumption that all containers originated from China.

The court acknowledged that the issues raised were a mix of fact and law, emphasizing that the authenticity of the certificates and adherence to procedural requirements should be addressed by the Adjudicating Authority. The court highlighted the importance of the importer's reply to the show cause notice in clarifying the genuineness of the certificates and their impact on the adjudication process. While declining to quash the show cause notice, the court granted the petitioner the opportunity to file a reply within 30 days, focusing on the validity of the certificates and procedural compliance. The Adjudicating Authority was directed to prioritize the certificate's validity as the first issue to be decided, ensuring a fair adjudication process with a chance for the petitioner to present their case.

In conclusion, the court disposed of the Writ Petition without costs, allowing the petitioner to address the raised issues in their reply to the show cause notice, emphasizing the importance of a thorough adjudication process and granting the petitioner a fair opportunity to present their arguments.