Legal principle

An importer's truthful declaration under Section 46(4)—including the RVC particulars in a Certificate of Origin—is a substantive statutory obligation, and the power under Section 28 to recover duty escaped by suppression existed independently of the later-inserted COO-verification mechanism in Chapter V-AA and Section 28DA.

Court decision

The writ petition was dismissed in favour of the Union. Both jurisdictional submissions of the Petitioner were rejected, following Trafigura India Pvt. Ltd. and Purple Products Pvt. Ltd., with the Court finding no material difference on facts or law warranting departure. The Court granted liberty to avail the statutory appeal under Section 128 against the OIOs dated 05.07.2019 and 27.09.2019, directing that an appeal filed within four weeks not be dismissed as time-barred if otherwise maintainable, and expressly declined to express any opinion on the merits of duty quantification, confiscation, or penalty.

Facts

The Petitioner, an importer of tin ingots, imported High Grade Tin Ingots manufactured in Malaysia by Malaysia Smelting Corporation (MSC), claiming 0% Basic Customs Duty under Notification No. 46/2011-Cus on the strength of Certificates of Origin issued by MITI under the ASEAN-India FTA/Rules of Origin 2009. DRI investigation, including a retroactive check under Article 16 and a verification visit under Article 17 of Annexure III to RoO 2009, found that MSC converted non-ASEAN tin ore supplied free of cost by traders on a job-work basis, and that the RVC declared (over 70%, based on a 2013 cost sheet reused over a long period) was erroneous—the actual regional value addition (smelting charges) did not meet the 35% RVC threshold. SCNs dated 07.12.2018 and 11.12.2018 were issued demanding differential duty under Section 28(4), penalties under Sections 112(a)/114A and 114AA, and confiscation under Sections 111(m)/111(o) of the Customs Act, 1962. During the writ proceedings, the SCNs culminated in two OIOs—one dated 05.07.2019 confirming differential duty of Rs. 99,84,190 plus interest, confiscation of goods valued at Rs. 16,77,69,937, and penalty of Rs. 99,84,190 under Section 114AA, and another dated 27.09.2019 confirming differential duty of Rs. 39,69,936 under Section 28(4) plus interest—which the Petitioner challenged before the Delhi High Court.

Key provisions

• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 46, Customs Act, 1962 — Entry of goods on importation
• Section 5(1), Customs Tariff Act, 1975 — Levy of a lower rate of duty under a trade agreement