Legal principle

Where Certificates of Origin issued by the exporting country's authorities have been verified and certified correct, the DRI has no authority to question them, and in the absence of even an iota of evidence of suppression the extended period under Section 28(4) cannot be invoked, rendering the entire demand proceedings time-barred.

Court decision

The Tribunal allowed all the appeals, setting aside the entire confirmed demands, interest thereon and penalties, with consequential relief as per law. It held that the DRI has no authority to question COOs issued and duly affirmed by Bangladesh; that partial sample-testing results cannot be applied to all consignments; that no link of the appellants with the purported non-fulfilment of SAFTA conditions was established; and that the Revenue failed to bring even an iota of evidence to fasten the larger period, making the entire proceedings time-barred. On the procedural points, it held there was no fatal error in the Commissioner adjudicating under Section 28 alongside Section 17(5), and that the Revenue was not obliged to appeal to Commissioner (Appeals) since resort to Section 28 upon receiving information of contravention is permissible.

Facts

A group of Kolkata-based importers, including edible-oil/agro firms such as M/s. Aone Agro Products Pvt. Ltd., M/s. Budge Budge Refineries Ltd., M/s. V.K. Oils Ltd. and M/s. Bengani Commodities Pvt. Ltd., together with their directors/proprietors, imported consignments from Bangladesh during 18.12.2019 to 06.02.2020 claiming SAFTA duty exemption on the strength of Certificates of Origin (COOs). The Commissioner of Customs (Preventive), West Bengal, through three Orders-in-Original dated 28.12.2023, 29.11.2023 and 29.12.2023, confirmed duty demands, interest and penalties, invoking the extended period under Section 28(4) and re-determining the self-assessment under Section 17(5). Samples had been drawn and tested by CRCL at import, showing erucic acid content both more and less than 2%, and Indian officials had sent the COOs to Bangladesh officials for verification, who certified them correct. The DRI nevertheless disputed the COOs as not fulfilling SAFTA conditions, leading to these appeals before the CESTAT, Kolkata.

Key provisions

• Section 28DA, Customs Act, 1962 — Procedure regarding claim of preferential rate of duty
• Section 28(4), Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 17(5), Customs Act, 1962 — Assessment of duty
• Section 5, Customs Tariff Act, 1975 — Levy of a lower rate of duty under a trade agreement
• Rule 3(a), Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Preferential tariff claim
• Rule 4, Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Origin related information to be possessed by importer
• Rule 5, Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Requisition of information from the importer