2024 (2) TMI 780 - HC - Customs

Seeking release of 540 bags of areca nuts of Sri Lankan origin imported without providing a bank guarantee - extending the benefit of customs duty exemption under the applicable notification - indemnity bond may be called for - HELD THAT - The record reflects that a certificate of origin was issued on 22.06.2023 by the Commercial Research Officer, Colombo. This certificate was issued under the ISFTA. In terms of Rule 6 of the CAROTA Rules, the proper officer requested that the authenticity of the certificate and the correctness of information provided therein be verified by the verification authority - These documents indicate conclusively that, upon verification of the certificate of origin, it was certified that such certificate was digitally signed by the authorized officer of the Department for signing certificates of origin under the ISFTA. In spite of such verification, the respondents contend that further information is required in light of the communication dated 14.09.2023 from D.L.K. Spice Export. The communication from D.L.K. Spice Export specifies the names of certain importers, but the name of the petitioner is not mentioned therein although the bill of entry is prior to the communication. The request for further information has not been placed on record. No doubt, under sub-rule 2 of Rule 6, it is permissible for the proper officer to request for additional information pursuant to verification. A certificate of origin was issued by the relevant Sri Lankan authority; such certificate was subsequently verified by the Department of Commerce, Government of Sri Lanka; the communication from D.L.K. Spice Export does not mention the petitioner; and the request for additional information is not on record, this is an appropriate case to direct the provisional release of goods, albeit subject to limited safeguards to protect revenue interest under the facts and circumstances. The petitioner is directed to provide an indemnity bond for 100% of the duty payable in case it is concluded in the assessment proceedings that the petitioner is not entitled to exemption from Customs duty - Petition disposed off.

Summary

Issues involved: Release of areca nuts under customs duty exemption, verification of certificate of origin, request for additional information, entitlement to release of goods without bank guarantee.

The petitioner sought the release of 540 bags of areca nuts of Sri Lankan origin under customs duty exemption. The petitioner claimed that the goods were imported under the Indo-Sri Lanka Free Trade Agreement and had submitted a certificate of origin verified by the Department of Commerce, Sri Lanka. The petitioner argued for release without a bank guarantee, suggesting an indemnity bond instead.

The petitioner's counsel emphasized that the certificate of origin was issued by the Commercial Research Officer in Colombo and was subsequently verified by the Department of Commerce in Sri Lanka. Despite this verification, the respondents insisted on further information based on a communication from the exporter, D.L.K. Spice Export. The court noted that the communication did not mention the petitioner and that no request for additional information was on record.

The court observed that the certificate of origin was duly verified by the relevant authorities in Sri Lanka and that the lack of specific information regarding the petitioner in the exporter's communication warranted the provisional release of the goods. The court directed the petitioner to provide an indemnity bond for 100% of the duty payable and a bank guarantee for 10% of the customs duty from a nationalized bank. Upon fulfilling these conditions, the goods were to be provisionally released by the respondents.

In conclusion, the court disposed of the writ petition by ordering the petitioner to provide the specified bonds and guarantees within a week. The provisional release of the goods was contingent upon meeting these conditions, and the connected miscellaneous petition was closed without any costs imposed.