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2020 (5) TMI 156 - HC - CustomsRelease of Bank Guarantees - import of Gold Granules - exemption from payment of Customs duty in terms of Sl.No.966 of the table to Notification No.82 of 2018- Cus dt.31-12-2018 amending Notification No. 46/2011 dt. 01-06-2011 - retroactive check of the certificate of origin - HELD THAT - It is the duty of the respondents to complete the provisional assessment and also return the Bank Guarantees given by the petitioner towards the exports made by it under the Bills of Entry referred to above since there is no dispute now about the Country of origin of the goods in question - respondents are directed to (i) release six Bank Guarantees furnished by the petitioner on or before 4.5.2020 since the petitioners have given Bonds for the goods covered by the 6 Bills of Entry, and (ii) also complete the provisional assessments in respect of the said Bills of Entry within a period of three (03) months from the date of receipt of a copy of this order and communicate their deposition to the petitioner. Petition allowed.
Issues:
1. Classification of imported goods and claim for exemption from customs duty. 2. Submission of Country of Origin Certificates and insistence on Bank Guarantee by customs authorities. 3. Retroactive check by competent authority in Indonesia and obligation to return Bank Guarantees. 4. Compliance with Customs Tariff rules regarding AIFTA certificate of origin and retroactive checks. 5. Representation to Deputy Commissioner of Customs for return of Bonds and Bank Guarantees. 6. Entitlement to release of Bank Guarantees based on verification certificates from Indonesian Government. Issue 1: Classification of imported goods and claim for exemption from customs duty The petitioner, a partnership firm engaged in internal trade, imported gold granules and classified them under CTH No.7108 1300 of the Customs Tariff Act. They claimed exemption from customs duty under a specific notification. The exemption was subject to proving the goods' origin from Indonesia, as per the Customs Tariff rules. Issue 2: Submission of Country of Origin Certificates and insistence on Bank Guarantee The petitioner submitted Country of Origin Certificates from Indonesia to claim duty exemption. However, the customs authorities insisted on a Bank Guarantee despite the certificates and a circular from the Central Board of Excise and Customs. The petitioner, under duress, provided Bonds and Bank Guarantees to clear the goods. Issue 3: Retroactive check by competent authority in Indonesia and obligation to return Bank Guarantees A retroactive check by the Indonesian Government confirmed the goods' origin in Indonesia. The petitioner argued that the respondents should return the Bank Guarantees based on this verification, as per Customs Tariff rules. Issue 4: Compliance with Customs Tariff rules regarding AIFTA certificate of origin and retroactive checks The petitioner cited Customs Tariff rules requiring the return of AIFTA certificates if not accepted by the importing party. They argued that the retroactive check should have been completed within a specified period, which was not done by the respondents in this case. Issue 5: Representation to Deputy Commissioner of Customs for return of Bonds and Bank Guarantees The petitioner made a representation to the Deputy Commissioner of Customs requesting the return of Bonds and Bank Guarantees, highlighting the non-initiation of retroactive verification within the stipulated time frame. Issue 6: Entitlement to release of Bank Guarantees based on verification certificates from Indonesian Government Based on verification certificates from the Indonesian Government, the petitioner was deemed entitled to the release of Bank Guarantees. The court directed the respondents to release the Bank Guarantees and complete provisional assessments within a specified time frame. In conclusion, the High Court allowed the Writ Petition, directing the respondents to release the Bank Guarantees and complete provisional assessments within the specified timeline, as the goods' origin was confirmed, resolving the issues raised by the petitioner regarding duty exemption and compliance with Customs Tariff rules.
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