Legal principle

Preferential duty benefit under an FTA exemption notification cannot be denied on the basis of a Board circular alone; where doubt is raised on a certificate of origin it must be verified with the issuing authority in the exporting country, and without such verification the certificate cannot be discarded.

Court decision

The Tribunal (Ramesh Nair, Member (Judicial) and Raju, Member (Technical)) allowed the appeals and set aside the impugned orders, holding the denial of the preferential benefit solely on the basis of the Board circular, without any retroactive check/verification of the Certificate of Origin with the Malaysian issuing authority, to be 'absolutely illegal and incorrect'; the benefit of Notification No. 46/2011-Cus could not be denied.

Facts

M/s Uni Colloids Impex Pvt Ltd, through CHA M/s Jasvant B. Shah, filed Bill of Entry No. 9248573 dated 14.12.2018 for clearance of 600 bags of Majulah brand 10-12% fat alkalized cocoa powder from Malaysia under CTH 18050000, self-assessing with NIL rate of duty under Notification No. 46/2011-Cus (Sl. No. 155(1)). The department, relying on a Board letter F. No. 456/12/2013-Cus.V dated 07.05.2014 (forwarded by JNCH letter dated 17.09.2018) that preferential benefit under Notifications 46/2011-Cus and 53/2011-Cus be denied for cocoa powder imported from Malaysia under FTAs, denied the exemption and directed clearance at full rate of duty. The adjudicating authority (order dated 23.01.2019) denied the benefit, Commissioner (Appeals) concurred and dismissed the importer's appeal, and a connected departmental appeal against OIO dated 12.10.2020 was also before the Tribunal.

Key provisions

• Section 151A, Customs Act, 1962 — Instructions to officers of customs