2011 (4) TMI 271 - AT - Customs

Demand - Classification - Notification No.26/2000 dated 1.3.2000 - concessional rate of duty - All these documents relate to the month of March 2003 i.e. after the period of dispute and are intended to show that remelted copper ingots were imported by the appellant from the Sri Lankan exporter at US 1550 PMT after the period of dispute also - it is pointed out that the average value of copper scrap imported by M/s. Sri Chirag Pvt. Ltd. is less than 65% of the average value of the remelted copper ingots imported from them by the appellant - it is necessary that all the documents produced by the appellant along with the two miscellaneous applications be received and admitted as evidence - It is open to the appellant to produce all the original documents before the Commissioner and establish that the country of origin in this case was correctly determined in accordance with the Determination of Origin Rules - Appeal is allowed by way of remand

Summary

Issues Involved:

1. Validity of the Country-of-Origin Certificate (C.O. Certificate)
2. Compliance with the Determination of Origin Rules
3. Reliance on Cost Statement and its applicability
4. Invocation of extended period of limitation under Section 28 of the Customs Act
5. Admissibility of additional documents and evidence

Detailed Analysis:

1. Validity of the Country-of-Origin Certificate (C.O. Certificate):

The appellant contested the reliance on the C.O. Certificate issued by Sri Lankan authorities, arguing that the Customs authorities were bound to accept it and could not question its validity. The appellant cited the Bombay Chemicals Pvt. Ltd. vs. UOI case, where it was held that Customs authorities must accept certificates issued by competent authorities without questioning their contents. The Board's Circular No.73/2003-Cus. dated 13.8.2003 was also cited, which mandated the acceptance of such certificates. The Tribunal noted that the adjudicating authority failed to properly consider this circular and the appellant's reliance on it, which should have been honored as per the Board's instructions.

2. Compliance with the Determination of Origin Rules:

The appellant was required to prove the origin of the goods as per the Determination of Origin Rules under the India-Sri Lanka Foreign Trade Agreement (ISFTA). The Customs authorities found that the value of the raw material (copper scrap) exceeded the 65% limit of the FOB value of the finished goods, thus violating the origin norms. However, the Tribunal noted that the adjudicating authority did not properly consider the documents provided by the appellant, which indicated that the value of the raw material was within the permissible limit. The Tribunal emphasized the need for a thorough examination of these documents to determine compliance with the origin rules.

3. Reliance on Cost Statement and its Applicability:

The appellant argued that the Cost Statement relied upon by the Revenue was not applicable to the period of dispute (March to August 2002) as it was submitted to the Sri Lankan authorities on 14.3.2003. The Tribunal found merit in this argument, noting that the adjudicating authority failed to address this objection and relied on the Cost Statement without considering its relevance to the disputed period. The Tribunal directed the adjudicating authority to re-examine this aspect in light of the appellant's objections.

4. Invocation of Extended Period of Limitation under Section 28 of the Customs Act:

The show-cause notice invoked the extended period of limitation on the grounds of misdeclaration and suppression of facts by the appellant. The appellant contested this, arguing that the demand was barred by limitation. The Tribunal did not make a definitive ruling on this issue but noted that it should be reconsidered by the adjudicating authority during the de novo adjudication process.

5. Admissibility of Additional Documents and Evidence:

The appellant filed two miscellaneous applications to bring additional documents on record, including commercial invoices, bills of lading, and bills of entry, to support their case. The Tribunal rejected these applications as the documents were unauthenticated photocopies but allowed the appellant to produce the original documents before the adjudicating authority during the remand proceedings. The Tribunal emphasized the importance of considering all relevant documents to reach a fair decision.

Conclusion:

The Tribunal set aside the impugned order and remanded the case to the adjudicating authority for de novo adjudication. The Commissioner was directed to re-examine the evidence, including the original documents, and consider the appellant's objections and the Board's circular. The Tribunal emphasized the need for a thorough and fair assessment of compliance with the Determination of Origin Rules and the validity of the C.O. Certificate. The appeal and the miscellaneous applications were disposed of accordingly.