Case law
Judgments from CESTAT, the High Courts and the Supreme Court, each summarised and linked to the provisions it applies.
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Madras High Court · 29 Jan 2019
M/S.Unique Spices vs The Commissioner Of Customs
Legal principle
Customs authorities cannot insist on verification of a Certificate of Origin in every ISFTA import—verification is permissible only where there is doubt regarding genuineness or on a random basis—and if the verification is unreasonably delayed, particularly for perishable goods, the importer becomes entitled to release of the goods under the ISFTA, subject to the outcome of verification.
Court decision
The Madras High Court (G.R. Swaminathan, J.) allowed all four writ petitions and directed the respondents to conclude all formalities and release the goods forthwith, the clearance being subject to the outcome of the verification exercise; the respondents were left at liberty to take action as per law if the documents turned out to be not genuine, with no costs and connected miscellaneous petitions closed.
Facts
M/s. Unique Spices, an importer and trader of areca/betal nuts, imported four consignments of Sri Lankan areca nuts totalling 180 MTS, which landed at Tuticorin on 05.11.2018; Bills of Entry were filed the same day and the first check examination found the goods to be as declared. The importer claimed duty exemption under the Indo-Sri Lanka Free Trade Agreement (ISFTA) based on Certificates of Origin issued by the Sri Lankan competent authority. Relying on DRI Alert Circular No. 34 of 2015 (cautioning against fabricated country-of-origin declarations), the customs authorities sent the COO, invoices and bills of lading for verification to the Director (ICD), CBEC, New Delhi and the Additional Director, DRI, Chennai, and sought verification with Sri Lankan counterparts. Pending verification, the department sought a 100% bank guarantee, required bonding, and permitted the importer to bond the goods under Section 49 of the Customs Act, 1962. Receiving no response from the Sri Lankan counterparts for over 84 days, the respondents declined to release the cargo, prompting the writ petitions.
Key provisions
- Section 49, Customs Act, 1962 — Storage of imported goods in warehouse pending clearance or removal