NON MENTION OF INVOICE NUMBER IN THE CERTIFICATE OF ORIGIN

[Mr. M. GOVINDARAJAN]

Certificate of origin

A Certificate of Origin (‘CO’ for short) is an important international trade document that certifies that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country.   A certificate of origin / declaration of origin are generally prepared and completed by the exporter or the manufacturer, and may be subject to official certification by an authorized third party. It is often submitted to a customs authority of the importing country to justify the product's eligibility for entry and/or its entitlement to preferential treatment.   It is the proof certifying the origin of the product, which is in turn the basis to determine the tariffs and other trade measures that will be applied.  A certificate of origin helps to determine whether a product can be legally imported, particularly when the importing country is applying a ban or a sanction on goods originating in certain countries.

Verifying the CO

Verification is a process carried out in the importing country to confirm the originating status of goods which have already been imported. In this process, verifying the certificate of origin submitted to customs authorities is an important step. The customs officer may need to check the authenticity of the certificate at hand by comparing the reference number thereof and examining the signature and stamp on it surface. He also needs to check to make sure all the fields in the certificate have been duly filled and the information in the certificate is consistent with that in other trade documents.   Where the certificate of origin is found to contain some errors, the certificate may be rejected; however, minor and formal errors are usually not the basis for an automatic rejection of the validity of a certificate.  In the event that the customs authority remains in doubt despite there is no sign of non-compliance on the certificate of origin, it may ask to physically check the imported goods. Moreover, the customs authority may also contact the issuing authority in the exporting country to verify any information it considers necessary before making the decision.

Contents of CO

The following details are to be filled in CO-

• Goods consigned from (Exporter's business name, address, country);
• Goods consigned to (Consignee's name, address, country);
• Means of transport and route (as far as known);
• Item number;
• Marks and number of packages;
• Number and kind of packages, description of goods;
• Origin criterion;
• Gross weight or other quantity
• Number and date of invoices;
• Certification;
• Declaration by the exporter.

Issue

The issue to be discussed in this article what will be the consequences if the invoice number is not mentioned in CO with reference to decided case law.

Case law

In NIRMA LTD. VERSUS C.C. -JAMNAGAR - 2023 (2) TMI 996 - CESTAT AHMEDABAD the appellant had purchased coal on high seas sale basis from the consignment originally purchased by Anik Industries Limited.  Total consignment consisted of 51,397,979 MT out of which the appellant had purchased 15,697,979 MT of steam coal (non coking coal).  The entire consignment arrived by MV Intrepid.   The appellant produced the certificate of origin which does not mention the invoice number by which the appellant had procured the said coal on high sea sales basis.  The entire benefit has been denied because column-10 of the certificate of origin relating to number and date of invoices is left blank.  Therefore the appellant preferred the present appeal before CESTAT. 

The appellant submitted the following before the CESTAT-

• It was apparently an inadvertent mistake on the part of the issuing authority for which the benefit of Notification No. 46/2011-Cus dated 01.06.2011 cannot be denied when all other details mentioned in the certificate of origin which match with consignment.
• The column number 8 of the said certificate of origin clearly mentions that the consignment was wholly obtained in the country of origin i.e. Indonesia. 
• All the conditions of the Notification No. 46/2011-Cus dated 01.06.2011 are satisfied.
• The requirements of the Customs Tariff [Determination of Origin of Goods under the preferential trade agreement between the Government of Member States of the Association of the South East Asian Nations (ASEAN) and the Republic of India Rules, 2009 (‘Rules’ for short) are satisfied.

The Customs Authorities submitted that the conditions of the Notification have to be strictly followed.  The Performa for the invoice attached of the aforesaid Rules clearly requires mention of invoice number in the Certificate of Origin. 

The CESTAT considered the submissions of the parties to the present appeal.  The CESTAT analyzed the provisions of the Rules and also CO.  Rule 3 provides that t he products imported by a party which are consigned directly under rule 8, shall be deemed to be originating and eligible for preferential tariff treatment if they conform to the origin requirements under any one of the following:-

1. products which are wholly obtained or produced in the exporting party as specified in rule 4; or,
2. products not wholly produced or obtained in the exporting party provided that the said products are eligible under rule 5 or 6.

The CESTAT observed that the certificate produced by the appellant in column number 8 clearly mentions that the goods were wholly obtained thereby implying that the condition 3(a) of the aforesaid rules stands satisfied.  The consignment has been received directly from Indonesia to Indian Port to Bhavnagar and therefore, the condition of Rule 8 of the aforesaid Rules also stands satisfied.

The only issue remains to be decided by CESTAT is if the defect of non mention of invoice number in the Certificate of Origin can be enough to reject the certificate of origin and debar the appellant from benefit of Notification No. 46/2011-Cus dated 01.06.2011, which provides that if the importer proves to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of the countries as mentioned in Appendix I-

• Malaysia, Singapore, Thailand, Vietnam, Myanmar, Indonesia, Brunei Darussalam, Lao People’s Democratic Republic, Cambodia

 or Appendix II - Philippines, in accordance with provisions of the  Rules, the exemption to that goods are given.  The CESTAT observed that there is no direct requirement in the Rules or in Notification that invoice number has to be mentioned in certificate of origin. The Performa attached to the Rules contains in column 10 space for the invoice number and date.  The CESTAT found that all other details i.e. the name of name of the ship, the date of sailing, entry of cargo and origin etc are in consonance with the claim made by the appellant.   Mere non-mention of the invoice number in the certificate of Origin is not sufficient reason to deny the benefit of Notification No. 46/2011-Cus dated 01.06.2011.   The purpose of the Notification is to grant exemption under the preferential Trade Agreement with Asian Countries and from the certificate of country of origin produced by the appellant. It is sufficiently established that the goods have indeed originated in Indonesia and were wholly obtained in Indonesia.  Therefore CESTAT found no merit in the impugned order and set aside the said order. 

Reference:

1. https://en.wikipedia.org/wiki/Certificate_of_origin
2. https://www.mofa.go.jp/policy/economy/gsp/specimen-1.pdf