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TMI Blog2025 (4) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... the department vide Show Cause Notice dated 19.06.2019. The SCN was adjudicated vide OIO dated 19.11.2019. In an appeal filed by the party, the Commissioner (Appeals) upheld the OIO vide OIA dated 22.12.2020. Hence, this appeal. 2. Broadly, the appellant has relied on the following grounds : 2.1 The Certificate of Origin (COO) benefit is subjected to rules notified vide Notification 187/2009 which provides for a process of verification in case of any doubt. In addition to this notification, the department has also issued instructions/circulars in this regard. CEPA itself contains provisions to verify COO. Circulars are binding on the department and CEPA provisions need to be honored otherwise it will be a violation of Article 51(C) of the Constitution. Instead of rejecting the COO suo-moto, the revenue should have sent it for verification. The crux of his argument is that without verifying COO by following the procedure prescribed in the Notification, Instruction, and CEPA, the department can not reject the benefit of the COO. This argument has another implicit logic that the CTH declared by the appellant is correct since the same has been mentioned in COO which still remains va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) E.L.T. 162 (S.C.) 3. To the contrary, Revenue submissions are as under: 3.1 Classification of the goods and the exemption under CEPA are two separate issues. The CEPA was operationalized vide Notification 152/2009- Custom dated 31.12.2009 which was further amended vide Notification No 66/2016-Customs dated 31.12.2016. As per the amended notification, following entry was exempted: Sr No. Chapter, Heading, Sub-heading or tariff item Description of Goods Rate (in percentage unless otherwise specified) 597 7405 to 7407 All Goods 0.00 Thus, the goods falling under sub-headings 7405 to 7407 were exempted vide the above notification. The appellant has classified their goods under Sub-heading 7407 with the description Copper Rods. 3.2 Sub-heading 7407 & 7408 are reproduced as under: 7407 COPPER BARS, RODS AND PROFILES 740710 - Of refined copper: 74071010 --- Electrolytic copper rods or black copper rods 74071020 ---Other copper rods Further, Sub-heading 7408 is reproduced as under: 7408 COPPER WIRE - Of refined copper: 7408 11 -- Of which the maximum cross-sectional dimension exceeds 6 mm: 7408 11 10 ---Copper weld wire 7408 11 90 ---Other 3.3 Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above. Entry No 597 in the Notification 66/2016-Customs exempts the goods which fall under CTH 7405 to 7407. Since correct classification of the goods in question is under Sub- heading 7408, the benefit has been denied by the department. There is no doubt about the fact that the goods were in coil form as has been admitted by the appellant, even in their grounds of appeal. When goods are in coil form, they cannot be classified under sub-heading 7407 since Note 1(d) to Chapter 74 excludes goods in coil form from the scope of "Bars and Rods". 4. The contention of the appellant that verification should have been done as prescribed in Notification No 187/2009-Customs is misplaced. Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea) Rules, 2009 have been notified vide this notification. The rules provide mechanism to verify COO to check whether or not the goods have originated in South Korea. Various criterion such as Regional Value Content (RVC), change in HSN code, etc have been provided which are to be applied to determine whether goods originated in South Korea or not. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accuracy of information regarding origin, Le. where a doubt arises on whether the product qualifies as an originating good under the relevant Rules of Origin. In other words, these are cases where there is a reasonable belief that a product Therefore, the mechanism provided for verification of any document such as Rules of Origin, Instruction or any Circular issued in this regard is regarding originating criterion only which is not under dispute here. 4.3 In the instant case, the issue is not about the origin of goods and the criterion provided for the same. The issue is mis-declaration of goods and thereby, the CTH. Description of Goods and Sub-heading were misdeclared to claim COO benefit. No mechanism or procedure has been provided in either the statute or any of the Rule/Instruction/Circular to correct the description of goods or the CTH in the COO. 4.4 A case on similar facts has been decided by Hon'ble Gujarat High Court. In TRAFIGURA INDIA PVT LTD VS UNION OF INDIA ( 2023-TIOL-737-HC-AHM-CUS). Hon'ble Court dealt with a similar situation in which guidelines of verification were not followed by the department. It was a case of dispute about Regional Value Content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is applicable for live consignments, the intent of the legislature becomes pretty clear on a bare perusal of this section. It has been clearly mentioned in this section that the tariff item which is not eligible for preferential tariff agreement, the Certificate of Origin shall be marked as "INAPPLICABLE" and the preferential tariff treatment may be refused without verification. Here the whole basis for exemption was tariff Sub-heading which is a substantive requirement. The most significant eligibility criteria was the Tariff Sub- heading which has to be satisfied to claim the benefit of the notification. 4.6 Country of Origin certificate is no authority decides Sub-heading of the goods. When Chapter Note has clearly excluded goods in coil form from the scope of Bars and Rods, Chapter Note is the only tool to decide Sub-heading of the goods and not otherwise. 4.7 In view of the above submissions, verification of the COO was not required when the goods were found mis-declared. The goods were found mis-declared/mis-classified and so, the COO benefit could not be extended. The department resorted to a substantive provision i.e. Section 28 and this position of law has been upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority has elaborately dealt with the issue in its findings. It is seen that originally when the Bill of Entry was filed, it was covered by Invoice No. 12336 dated 20-10-2003 of M/s. Red Sea Trading Co. Ltd., Hong Kong, which indicated China as the Country of Origin. It is seen that later, this invoice had been replaced by another fabricated invoice of M/s. Ceyenergy Electronic Co. Pvt. Ltd., Sri Lanka. Even though the investigations have revealed that the Sri Lankan authorities indeed had given the Certificate of Origin, the learned Commissioner had given elaborate reasons for not giving the benefit of Indo-Sri Lankan Free Trade Agreement benefit...... 7.3 The investigations have clearly revealed that the goods are of Chinese origin. Further, the Commissioner has clearly given a finding that in terms of the Origin Rules issued by the Government of India, the goods will not be entitled for the benefit of the exemption under the ISFTA. In view of this, the demand of duty on the impugned item is in order. This judgment was also upheld by Hon'ble Supreme Court reported in 2015(315)ELTA172(SC). 5.3 ALFA TRADERS Vs Commissioner of Customs, Cochin- 2007 (217) E.L.T. 437 (Tri. - B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction/Circular issued by the department on the COO is for verification when the doubt is with regard to originating criterion. Here, the issue is of mis-declaration/mis-classification of imported goods, and not the originating criterion of such goods. Similarly, in other case law mentioned in para 12.9 of the Grounds of Appeal e.g. Nakoda Import Pvt Ltd Vs Uol-2017(349) ELT4, et al, facts were different from the instant case and hence, these are not applicable. 7. The contention of the appellant that the goods were in coil form for ease of transportation and it is a mode of packaging only; and that the classification should be done under Bars and Rods since the goods are going to be sold/used as Rod and not coil, is highly mis-placed. Classification has to be decided as per the Tariff Heading, Sub-heading, Section and Chapter Notes, etc, unless otherwise provided. As explained above, when Chapter Notes have clearly excluded the goods in coil form from the definition of Bars and Rods; end use has no effect on classification of the goods. 8. Section 111(m) and 111(o) of the Customs Act provides that the goods are liable for confiscation when the goods do not correspond to value or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department could find out mis-declaration and mis-classification from the documents submitted at the time of import. In this era of self assessment, the most vital piece of information was mis represented before the department. Thus this is a clear cut case of suppression of facts. The very basis of exemption was the shape of the goods which was mis-declared and thus, mis-classified also. 9.4 As regards intention, it has been argued by the learned advocate for the appellant that they declared coil in the packing list and the COO and so, no intention/motive can be alluded to the appellant. Just a bare perusal of these documents proves the intention of the appellant. The intention of hiding actual and vital information while explicitly mis-declaring the goods is proven from the documents. The description of goods in the Packing List is explicitly mentioned as "Copper Rod Nominal Dia 8 mm with ASTM B49". In the detailed packaging of the goods which signifies packages, the appellant mentioned "Coil No". Similarly, in the COO, in the column "description of the goods, including quantity", "Copper Rod Nominal Dia 8MM with ASTM B49; 6CL 25MT 25000KG 25.149KG has been written. As per the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the action of recovery under Section 28 will be in respect of duties not levied or not paid or short levied or short paid or erroneously refunded. The consideration of (a) collusion or (b) any willful misstatement or (c) suppression of facts, are mentioned in Sub section (4) to be the grounds where the notice for recovery is issued invoking the extended period of limitation. What is noticeable is that collusion can be the ground to resort to Sub section (4). Furthermore, and importantly the word 'willful' does not precede the reason of suppression of facts' mentioned in Sub clause (c). In order to invoke Sub section (4) on the ground of suppression of facts, element of willfulness can be said to have been done away with. Suppression of facts simplicitor can be a ground here. 16.7 The suppression of fact is clearly attributed to the petitioners inasmuch as what was required to be disclosed and proof of contents of the Bills of Entry was to be subscribed in form of declaration under Section 46 of the Act. The petitioners had been in regular course of business of import and acted in such course. They were aware about RVC details which was wrongful and suppressive. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alment of facts. The suppression can take form of suggesting wrong facts and to obtain some advantage, which may not be available upon the disclosure of correct and genuine facts. Suppression may manifest itself in misrepresentation also. In the present case, the misrepresentation became suppression, as the exemption benefit or preferential duty benefit was obtained by putting forth wrong facts, which did not constitute eligibility to earn the exemption from the Basic Customs Duty. By suggesting wrong details and by subscribing untruth, essential conditions regarding RVC was not fulfilled. It partook suppression in eye of law and within the meaning of sub-section(4) of Section 28. Thus Hon'ble Court held that an extended period can be invoked for suppression of facts only and no willfulness i.e. intention is required to be present for such invocation. Further, the court held that when the facts which were required to be disclosed were not disclosed and this should be construed as suppression of facts. Hon'ble Court also held that suggesting wrong facts and taking some advantage out of it, which may not be available upon disclosure of correct facts is also suppression of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding in this regard and direct that Tariff Heading 74081190 is appropriate heading as indicated by the department. Therefore, exemption under CEPA notification was correctly denied and BCD @ 5% was correctly demanded, in Show Cause Notice dated 19.06.2019. 14.2. This brings us to the second issue about limitation, we find that the Bills of Entry in the instant case were filed from June 2017 to August 2017 and Show Cause Notice was issued on 19.06.2019. In the instant case, we find that in the relevant Bills of Entry in column of description of the goods, it was not declared that the goods were in coil form which was decisive factor in determining the correct classification. However, we also find that though not declared in the Bills of Entry, which is the most vital document in import, the party has claimed in the packing list that it was explicitly mentioned as "COPPER ROD NOMINAL DIA 8 MM WITH ASTM B 49 and in the detailed packing of the goods, the appellant had mentioned "Coil No". Packing list is reproduced below as specimen : - 14.3 The appellant has also mentioned that in the certificate of origin-CL is mentioned in the description portion which refers to coil. The departm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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