2025 (3) TMI 639 - HC - Customs

Seeking release of fresh garlic which has been imported by the Petitioner from Afghanistan without any condition of furnishing of a bank guarantee - HELD THAT - This Court is inclined to grant an opportunity to the Petitioner to clarify the actual position before the Respondent/Department. Accordingly let the present writ petition and the documents annexed therein be submitted by the Petitioner to the Commissioner of Customs (Preventive) NCH New Delhi and let the said official examine all the documents. If there is any document which is missing the Petitioner shall produce the same and satisfy the said Department with respect to all the other relevant aspects including the actual country of origin and applicability of SAFTA provisions to the impugned consignment. Considering the perishable nature of the goods seized the Department shall take a decision by the next date of hearing. The Petitioner to appear before the Custom Department on 13th March 2025.

Summary

ISSUES PRESENTED and CONSIDERED

The primary issue considered by the Court was whether the Petitioner was entitled to the release of imported goods, specifically fresh garlic, without the condition of furnishing a bank guarantee. This issue revolves around the interpretation and application of the South Asian Free Trade Area (SAFTA) provisions and the determination of the country of origin for the goods in question. The Court also considered whether the Customs Department's requirement for a bank guarantee was justified given the documentation provided by the Petitioner.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The legal framework primarily involved the Rules of Determination of Origin of Goods under SAFTA, as notified by Notification No. 75/2006-Customs (NT) and the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. These regulations dictate the documentation and verification processes required to claim preferential duty rates under SAFTA.

Court's Interpretation and Reasoning

The Court identified that the Customs Authorities had assumed an absence of requisite documents, including a complete chain of transit documents, which led to the denial of the preferential duty rate claim. The Court noted that the Customs Department's stance was based on the apparent inconsistency in the documentation, particularly the port of loading being in the UAE, which raised doubts about the goods' origin from Afghanistan.

Key Evidence and Findings

The Petitioner presented various documents, including a transit certificate, purportedly establishing Afghanistan as the country of origin. However, the Customs Department pointed out that the Bill of Lading indicated Jebel Ali, UAE, as the port of loading, creating a discrepancy that the Petitioner needed to address.

Application of Law to Facts

The Court applied the relevant legal provisions to the facts by granting the Petitioner an opportunity to clarify the documentation and the actual country of origin before the Customs Department. The Court emphasized the importance of resolving the documentary discrepancies to determine the applicability of SAFTA provisions.

Treatment of Competing Arguments

The Court acknowledged the Customs Department's concerns regarding the documentation inconsistencies and the potential impact on duty calculations. Simultaneously, it recognized the Petitioner's assertion that the necessary documents were available but not considered by the Department, thus warranting a re-examination.

Conclusions

The Court concluded that the Petitioner should be given a chance to present the complete set of documents to the Customs Department to resolve the discrepancies and verify the country of origin. This approach aimed to ensure a fair assessment of the duty applicability under SAFTA.

SIGNIFICANT HOLDINGS

The Court held that the Petitioner should submit the writ petition and accompanying documents to the Commissioner of Customs (Preventive) for examination. The Court directed that any missing documents should be produced by the Petitioner to satisfy the Department regarding the country of origin and the applicability of SAFTA provisions.

"Considering the perishable nature of the goods seized, the Department shall take a decision by the next date of hearing."

The Court established the principle that in cases involving perishable goods, expedient resolution of documentation and duty-related issues is crucial to prevent undue loss or damage.

The final determination was to allow the Petitioner an opportunity to clarify the documentation before the Customs Department, with the expectation of a decision by the next hearing date. The petition was disposed of with directions for compliance and further proceedings scheduled.