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2016 (9) TMI 1087 - AT - CustomsDenial of benefit of Notification No.105/99-CUS dated 10.08.1999, as amended - imposition of penalty under Section 112(a) of the Customs Act, 1962 - confiscation of imported goods - classification - processed cloves - Notification No.73/95-CUS(NT) dated 07.12.2005 - The Customs Tariff (Determination of Origin of Goods under Agreement on SAARC Preferential Trading Arrangements) Rules, 1995 (SAPTA Rules) - Bangladesh origin - valuation of cloves - whether the main appellant is eligible to avail partial exemption under Notification No.105/99-CUS dated 10.08.1999 when read with SAPTA Rules? Held that: - As per the first Proviso to this Notification, the Assistant Commissioner/Deputy Commissioner/Joint Commissioner has to be satisfied that imported goods are in accordance with the Customs Tariff (Determination of Origin of Goods under the Agreement on SAARC Preferential Trading Arrangement) Rules, 1955- [SAPTA Rules]. As per Rule 4 of the SAPTA Rules read with its Schedule even products processed in the member countries are eligible for concessions under SAPTA Rules when the base goods are not produced/manufactured in the contracting countries. The only requirement under these Rules is that a certification of origin has to be produced for availing concessions as issued by the designated authority of Govt. of exporting contracting state and notified to the other contracting states in accordance with the certification procedures mentioned in the form annexed to SAPTA Rules. It is observed from various provisions of SAPTA Rules and Notification No.105/99-Cus dated 10.08.1999 that there is no discretion or power with the Customs authorities to reject the certificate of origin given by the concerned contracting state. Para 9 of the same Schedule does give power to the contracting states to review/modify the said Rules. The decision the case ZUARI INDUSTRIES LTD. Versus COMMISSIONER OF C. EX. & CUSTOMS [2007 (3) TMI 12 - SUPREME COURT OF INDIA] is relied upon - Certificates of origin produced by the Appellant cannot be discounted. There is no evidence on record that designated authority of Bangladesh under SAPTA Rules was maliciously involved with the supplier of cloves and the Appellant. Processing of cloves - Held that: - minor activities done by the supplier will not make the goods as processed cloves and that such processed cloves come into existence only when oil is extracted from natural cloves. Only an appropriate authority of Bangladesh can certify as to what would be the value addition, after satisfying about the nature of processing activities done by the supplier and the extent of expenses incurred by such supplier in carrying out the activities of cleaning, handling, storage, sorting, packing etc. The decision in the case Chandreswar Singh v. State of Assam [1978 (8) TMI 190 - GAUHATI HIGH COURT] is relied upon. Certificates of origin issued by the designated authority under SAPTA cannot be rejected which is the only requirement for the satisfaction of the Customs department under Notification No.105/99-Cus dated 10.08.1999 - confiscation of goods and imposition of penalties fails - appeal allowed - decided in favor of appellant.
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