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2016 (4) TMI 1032 - DELHI HIGH COURT

2016 (4) TMI 1032 - DELHI HIGH COURT - 2016 (335) E.L.T. 639 (Del.) - Validity of circulars under Section 151A of the Customs Act - Whether ultra vires or not - Import of gold jewellery from Indonesia - Held that:- the impugned Circulars dated 6th October 2015 and 20th January 2016 do in fact whittle down the scope of the exemption available for import of gold jewellery from Indonesia, across the board, only because, according to the Department, the COOs issued by the Issuing Authority in Indone .....

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cular requires the importers to present facts in support of the COOs, which is not a requirement in the original exemption notification. There is considerable merit in the contention that this goes beyond the mandate of the Customs Tariff Origin Rules and constitutes an unreasonable and onerous condition as far as the importers are concerned. - As far as the circular dated 20th January 2016 is concerned, Regulation 2 (2) of the CPDA Regulations provides for a maximum payment of only 20% of d .....

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the concerned customs officer. It requires the officer to demand 100% bank guarantee even in respect of those B/Es which have been provisionally assessed under Section 18 of the Act. It certainly is contrary to proviso (a) to Section 151A inasmuch it dictates to the customs officer in what manner he should complete a provisional assessment. The consequent impugned letter dated 22nd January 2016 came to be issued to M/s. J.B. Overseas only on the basis of the said Circular. Therefore, the Circul .....

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d by Issuing Authority. Since the SCN has been issued on the basis of an invalid Circular, relegating the Petitioners to the alternative remedy of statutory adjudication and consequent appeal would be a pointless exercise, the said SCN and the proceedings consequent thereto are held to be invalid and unsustainable in law. The proceedings consequent thereto the circulars including the communication dated 22nd January 2016 issued to M/s. J.B. Overseas requiring it to furnish a bank guarantee of 10 .....

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har And Vibhu Bakhru, JJ. For the Petitioner : Mr. P. Chidambaram, Senior Advocate with Mr. Tarun Gulati with Mr. Kishore Kunal, Mr. Manish Rastogi, Mr. Shashi Mathew, Mr. Sparsh Bhargava and Mr. Rony O. John, Advocates. For the Respondent : Mr. Arjun Mitra and Ms. Pallavi Shali, Advocates for R-1 and R-4. Mr. S.K. Dubey and Mr. Udit Malik, Advocates for DRI. JUDGMENT Dr. S. Muralidhar, J. W.P. (Civil) No. 10538/2015 1. Writ Petition (Civil) No. 10538 of 2015 by the Bullion and Jewellers Associa .....

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s issued by the statutory authorities in Indonesia and the confirmation given by the government-owned companies in Indonesia. 2. While issuing notice in this writ petition, the Court by its order dated 6th November 2015 directed the Respondents to clear the consignments of gold imported from Indonesia provisionally in accordance with law and, in particular, the Customs (Provisional Duty Assessment) Regulations, 2011 ( CPDA Regulations ). By a further order dated 14th December 2015, the Court dir .....

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It seeks to challenge the further Circular dated 20th January 2016 issued by the CBEC giving directions to the Assessing Officer ( AO ) to follow the circular dated 6th October 2015 issued by the CBEC and to make provisional assessments in respect of the gold jewellery imported from Indonesia by demanding a bank guarantee (BG) for 100% of the duty differential. 4. Further, by the letter dated 22nd January 2016 issued by Respondent No. 2, the Assistant Commissioner of Customs, in the Office of t .....

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2016. The said interim order has continued since then. Background facts 6. The background facts are that the members of the Association are engaged in the business of import/export and trading of assorted gold jewellery. Each of the members has been issued an Importer-Exporter Certificate Code issued under the Customs Act, 1962 ( Act ). It is stated that during the period 2012-2015, the members of the Association regularly imported assorted gold jewellery from Indonesia classifiable under Tariff .....

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don Bullion Market Association ( LBMA ) which is stated to be the highest accreditation authority for the world bullion market. The shares of PT-Antam are also traded on the Indonesian Stock Exchange as well as the Australian Stock Exchange. 7. The Union of India through Ministry of Commerce and Industry (Respondent No. 4) entered into an Agreement on Trade in Goods under the Framework Agreement on the Comprehensive Economic Cooperation ('FTA') with the Association of Southeast Asian Nat .....

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Customs Tariff Origin Rules ) were notified on 31st December 2009. In exercise of the powers under the said Origin Rules, Exemption Notification No. 46/2011-Cus dated 1st June 2011 and Notification No. 12/2012-CE dated 7th March 2012 (amended) (hereinafter referred to Exemption Notification ) were issued. In terms of the Exemption Notification Nos. 46/2011-Cus and 12/2012-CE, the benefit of NIL rate of Customs Duty was granted to the goods imported by the members of the Association classifiable .....

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in Appendix-I, in accordance with the Origin Rules. 9. Under Rule 3 of the Customs Tariff Origin Rules, the origin criteria has been stipulated. It states that the 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 contingencies, namely (a) products which are wholly obtained or produced in the exporting party in terms of R .....

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se, "plant" means all plant life, including forestry products, fruit, flowers, vegetables, trees, seaweed, fungi and live plants; (b) live animals born and raised in the party; (c) products obtained from live animals referred to in clause (b); Explanation 1.- For the purpose of clauses (b) and (c), "animals" means all animal life, including mammals, birds, fish, crustaceans, molluscs, reptiles, and living organisms. Explanation 2.- For the purpose of this clause, "produc .....

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e the territorial water of the party, provided that that party has the right to exploit such water, seabed and beneath the seabed in accordance with the United Nations Convention on the Law of the Sea, 1982; (g) products of sea-fishing and other marine products taken from the high seas by vessels registered with the party and entitled to fly the flag of that party; (h) products processed and/or made on board factory ships registered with the party and entitled to fly the flag of that party, excl .....

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inery, discarded packaging and all products that can no longer perform the purpose for which they were produced and are fit only for disposal for the recovery of raw materials and such manufacturing .or processing operations shall include all types of processing, not only industrial or chemical but also mining, agriculture, construction, refining, incineration and sewage treatment operations; (j) products obtained or produced in the party solely from products referred to in clauses (a) to (i). 1 .....

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Certificates ) as per the specimen attached to the Customs Tariff Origin Rules. It has, however, to be issued by the government authorities (Issuing Authority) of the exporting party and notified to the other parties in accordance with the Operation Certification Procedures as set out in Annexure III thereof. 13. According to the Petitioner Association, its members had submitted COO Certificates and the entire set of documents which established the genuineness of the goods imported by them and t .....

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were produced, the Respondents appear to have approached the concerned authorities in Indonesia to check the same in terms of Article 16 of the Operational Certification Procedure as set out in Annexure III of the Customs Tariff Origin Rules. Articles 16 and 17 thereof reads as under: 16. (a) The importing party may request a retroactive check at random and/or when it has reasonable doubt as to the authenticity of the document or as to the accuracy of the information regarding the true origin o .....

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id AIFTA Certificate of Origin may be inaccurate, unless the retroactive check is requested on a random basis; (ii) the Issuing Authority shall respond to the request promptly and reply within three months after receipt of the request for retroactive check; (iii) In case of reasonable doubt as to the authenticity or accuracy of the document, the Customs Authority of the importing party may suspend provision of preferential tariff treatment while awaiting the result of verification. However, it m .....

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sub-paragraph (iii) shall be applied. (b) The Customs Authority of the importing party may request an importer for information or documents relating to the origin of imported good in accordance with its domestic laws and regulations before requesting the retroactive check pursuant to paragraph (a). 17. (a) If the importing party is not satisfied with the outcome of the retroactive check, it may, under exceptional circumstances, request verification visits to the exporting party. Prior to conduct .....

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verification visit; (ii) the written notification mentioned in sub-paragraph (i) shall be as comprehensive as possible and include : 1. the name of the competent authority issuing the notification; 2. the name of the producer/exporter whose premises are to be visited; 3. the proposed date of the verification visit; 4. the coverage scope or purpose of the proposed verification visit, including reference to the goods subject to the verification; and 5. the names and designation of the officials pe .....

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(v) the Issuing Authority receiving the notification may postpone the proposed verification visit and notify the importing party of such intention within fifteen days from the date of receipt of the notification. Notwithstanding any postponement, any verification visit shall be carried out within sixty days from the date of such receipt, or for such longer period as the parties may agree. (b) The importing party conducting the verification visit shall provide the producer/exporter whose goods ar .....

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rter shall be given thirty days from the date of receipt of the written determination to provide any written comments or additional information regarding the eligibility of the goods for preferential tariff treatment. If the goods are still found to be non-originating, the final written determination issued by the importing party shall be communicated to the Issuing Authority within thirty days from the date of receipt of the comments/additional information from the producer/exporter. (e) The ve .....

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ng, Indonesia issued clarifications dated 12th June 2015 as well as 30th September 2015 clarifying that the said COO Certificates were issued by them and that the gold jewellery imported from PT-Antam were of Indonesian origin. 15. It is stated that despite the categorical explanations furnished in the letter dated 30th September 2015 along with communications exchanged with the Indian Embassy in Indonesia, the Respondents proceeded to issue the impugned Circular dated 6th October 2015 denying t .....

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hanged between the CBEC and the Embassy of India on the one hand and the Municipality Office in Cakung, Indonesia on the other hand. On 30th September 2015, in response to a letter dated 22nd August 2015 issued by the Embassy of India in Jakarta, the Municipality Office in Cakung, Indonesia confirmed that the COO certificates had been issued in compliance with the prevailing regulations, including the regulations of the Trade Ministry of Indonesia. It also confirmed that the COO certificates wer .....

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ed gold dore bars. It was confirmed that they keep an overall control in this regard wherein it issues certificate stating the percentage of gold used of Indonesian origin which is verifiable from the records. The letter further mentioned about the pre-exportation verification of the origin of the goods on 27th April 2015 and set out the findings, which are summarised as under: (i) P-Antam is a gold mining state-owned company in Indonesia and its sources of gold originate from the seven mines sp .....

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FTA. (iv) The brief production process was enclosed as Annexure B to the letter. The gold ingots are transferred to P-Antam s jewellery manufacturing facility and passed into several processes, (i.e, rolling, punching, passing, finishing and investment casting process for rings) and the jewellery products were required to pass the quality control process and thereafter shifted to India. (v) Documentation on the refinery process was also set out in the letter. The inventory management of P-Antam .....

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ining ores from Indonesia. Being the only Indonesia company providing refinery services in producing LBMA certificated gold products, we strongly believe that significant amount of gold ores mined in Indonesia undergoes the refinery process in ANTAM s UBPP Loga Mulia. As proof of the vast amount of gold refinery processes in the company, ANTAM has recorded last year s processing to reach approximately 200 MT of gold dore (Please note that this is gold dore quantity and not refined gold quantity .....

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6th October 2015, the CBEC issued the impugned Circular on the subject matter of the imports of gold jewellery both under India-ASEAN FTA as well as India-Malaysia CECA. The said Circular states that out of a large volume of 690 certificates of origin (COOs) involved, four representative COOs were picked for verification. The Circular then states that in response there to, the Issuing Authority had forwarded a letter from P-Antam that they do not maintain any inventory to indicate the origin of .....

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the form of Gold Powder, Lumps and Cast Bars. It was further stated that in other words, the gold produced by the supplier in Indonesia has been made from mixing gold dore bars of foreign origin along with domestic origin without maintaining any records of origin. One such report received from Indonesia was enclosed as Annexures B and C to the said Circular. Since the manufacturers were using both, originating (wholly produced) and non-originating inputs in manufacture of gold jewellery and sin .....

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at the gold refined by P-Antam did not conform to the criteria of wholly obtained from Indonesia and therefore, the gold used for the manufacture of jewellery could not qualify for the benefit as originating goods . Submissions of the Petitioners 18. Mr. P. Chidambaram, learned Senior counsel for the Petitioners submits that the impugned Circular dated 6th October 2015 was issued in excess of the powers under Section 151A of the Act. It was submitted that the CBEC misinterpreted the Customs Tari .....

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ion of that express prohibition. The clarification given by the Indonesian authorities had been deliberately overlooked while issuing the impugned circular. 19. Mr. Chidambaram submitted that the powers under Section 151A of the Act cannot be exercised to restrict or deny opportunities of fair investigation and adjudication. Inasmuch as the Circular requires an Officer of the Customs who issued show-cause notice to not issue provisional assessments and also asked the original COOs along with app .....

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ty that the adjudication proceedings consequent to the SCN issued would be a pointless exercise since the superior authority had already issued a direction without permitting the subordinate authority to exercise discretion and come to an independent conclusion. Reliance was placed on the decisions in Filterco v. CST, MP 1986 (24) ELT 180 (SC), TVL Pizzeria Fast Foods Pvt. Ltd. v. CCT Ezhilagam 2005 (192) ELT 52 (Mad) and Vistar Construction Pvt. Ltd. v. Union of India 2013 (31) STR 129 (Del). I .....

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was maintained by the exporter whereas P-Antam's letter stated to the contrary. Secondly, the Circular proceeded on the presumption that the jewelleries were manufactured by mixing gold dore bars of foreign origin with those of domestic origin when in fact the letters from P-Antam and the Issuing Authority clarified that they were was manufactured by using materials of Indonesian origin. Thirdly, there was a ban on the export of mined gold from Indonesia and therefore the inference that Indo .....

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non-originating goods. In view of the confirmation by the Indonesian authorities that the jewellery exported to India were manufactured entirely using gold mined in Indonesia, Rule 12 of the Customs Tariff Origin Rules did not apply. 21. It was further contended that P-Antam group owned various mines in Indonesia and received gold dores from such mines. Merely because a separate inventory of gold received from these mines was not maintained (but it was clarified that the gold used in the product .....

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efore, the mischaracterisation of gold dore as refined gold was unwarranted. 22. It was submitted that the impugned Circular was also in violation of the Operational Certification Procedures agreed to between Government of India and the Government of Indonesia and provided in Annexure III to the Customs Tariff Origin Rules. The Respondents had, in terms of Article 16 of the said procedures, requested for a retroactive check to the Indonesian authorities which had already been carried out and sha .....

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nesian authorities, could not be the basis to deny preferential customs duty treatment to the members of the Petitioner Association. On their part, the members of the Petitioner Association had produced the necessary COOs which were also verified by the Respondent authorities at the time of clearance of imported goods. It was reiterated that the authenticity of the said COOs had not even been disputed by any authority. Therefore, it was irrational and unreasonable for CBEC to direct that the ben .....

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e power under Section 151A of the Act for issuing of Circulars/clarifications is for a limited purpose for clarifying ambiguous provisions and/for mitigating rigours of law and for an effective administration of taxing statute. It cannot be issued to fasten liability and raise demand of tax. Reliance was placed on the decision in UCO Bank v. Commissioner of Income Tax (1999) 237 ITR 889 (SC). 24. It was further submitted that the impugned Circular dated 6th October 2015 completely overlooked the .....

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er Section 151A (b) of the Act which specifically states that there can be no circular issued which seeks to interfere with the discretion of the quasi-judicial authority. 26. It was pointed out on behalf of M/s. J.B. Overseas, that despite furnishing COOs, the impugned letter dated 22nd January 2016 was issued by the Assistant Commissioner of Customs to it on the basis of the Circular dated 20th January 2016 asking it to furnish a bank guarantee for the entire amount of differential duty. This .....

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this is also contrary to the Exemption Notification which provides for the manner in which the Customs Officers ought to exercise their satisfaction for the purpose of ascertaining the Country of Origin of the imported goods. 27. It was also pointed out that the Respondents ought to have followed the provisions of the CPDA Regulations. Regulation 2 (2) thereof provides for maximum payment of only 20% of duty differential under Provisional Assessment. Therefore, the insistence on furnishing a ban .....

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ndia 2013 (31) STR 129 (Del) and Indian Institute of Aircraft Engineering v. Union of India 2013 (30) STR 689 (Del). It was also pointed out that the SCN dated 26th November 2015 issued to the members of the Petitioner Association is a virtual reproduction of the circular itself and therefore, there was no independent application of mind by the customs officials issuing such SCN. Reliance was placed on the decision in Faridabad Iron & Steel Traders Association v. Union of India 2004 (178) EL .....

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India v. Madras Steel Re-Rollers Association 2012 (278) ELT 584 SC in support of the view that the CBEC was empowered to issue such Circulars/Letters for the guidance of quasi-judicial authorities. It was further submitted that the Circular dated 6th October 2015 only carves out a complete procedure to be followed regarding import of gold jewellery and not a direction to the quasi judicial authority to decide the issue in any particular manner as contended by the Petitioners. It was also submit .....

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h regard to the Circular dated 20th January 2016, it was submitted that there is no contradiction between Regulation 2(2) and Regulation 4 of the CPDA Regulations and the Circular dated 6th October 2015. According to him, the Petitioners' contention that the Circular requires furnishing a bank guarantee of 20% under Regulation 2(2) is based on a erroneous reading of the said Regulation. The Circular dated 6th October 2015 stipulating the obtaining of a bank guarantee of 100% of the duty diff .....

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al affidavit dated 20th February 2016 of the Respondents in Writ Petition (Civil) No. 936 of 2016 to the affidavit dated 2nd November 2015 of Mr. Naresh Sharma, Director of M/s. J.B. Overseas wherein a Mr. Umed Singh was named as the other Director. Further reference was made the statement of Mr. Umed Singh under Section 108 of the Act dated 23rd December 2015 wherein he denied knowledge of M/s. J.B. Overseas or that he was its Director. However in the reply-affidavit filed by the Petitioner in .....

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cial and differential treatment to ensure the increasing participation to the new ASEAN Member States in economic integration and cooperation activities between India and ASEAN. The ASEAN-India Free Trade Area is also known as AIFTA which was defined in the Framework Agreement on Comprehensive Economic Cooperation between the Republic of India and ASEAN. 32. Article 7 of the ASEAN FTA talks of Rules of Origin and states that the Rules of Origin ( AIFTA Origin Rules ) and Operational Certificatio .....

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Rules of Origin for the AIFTA 33. The AIFTA Origin Rules has been set out, as already noticed, in Annexure-2 to the ASEAN FTA. Rule 1 contains the definitions . Originating products has been defined in Rule 1 (d) to mean products that qualify as originating in accordance with Rule 2. The term production has been defined in Rule 1 (e) to mean a large range of activities including manufacturing, producing, processing or assembling a good. Rule 2 sets out the Origin Criteria as under: For the purpo .....

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r 5 or 6. 34. Rule 3 set out what can be construed as wholly produced or obtained products . Rule 4 specifies what can be not wholly produced or obtained products . Under Rule 4 (a) a product shall be deemed to be originating if the AIFTA content is not less than 35 per cent of the FOB value ; and the non-originating materials have undergone at least a change in tariff sub-heading (CTSH) level of the harmonized system , provided that the final process of the manufacture is performed within the t .....

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A Certificate of Origin (Article 7 therein). Article 7 (c) and (d) which are relevant for the present purposes read as under: Issuance of AIFTA Certificate of Origin Article 7 (a) **** (b) **** (c) In cases where an AIFTA Certificate of Origin is not accepted by the Customs Authority of the Importing Party, such AIFTA Certificate of Origin shall be marked accordingly in Box 4 and the original AIFTA Certificate of Origin shall be returned to the Issuing Authority within a reasonable period but no .....

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rant the preferential tariff treatment if the clarification is found satisfactory. 36. Under Article 14 (a), the AIFTA Certificate of Origin is to be valid for a period of 12 months from the date of its issuance. Under Article 14 (b), the AIFTA certificate of origin requires to be submitted to the Customs Authority of the importing party within its validity period. 37. Article 16 provides for detailed procedure for verification. Article 16 (a) talks of the importing party requesting retroactive .....

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inaccurate unless the retroactive check is requested on a random basis. The Issuing Authority has to respond to the request promptly and a reply within three months after receipt of the request for retroactive check. Even when there is doubt as to the authenticity of the document, the Custom Authority would release the goods to the importer, subject to any administrative measures deemed necessary, provided that they are not subject to import prohibition or restriction and there is no suspicion .....

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tification, name of the producer/exporter whose premises are to be visited, the proposed date of the verification visit, the names and designation of the officials performing the verification visit. The very purpose of Article 17 is to give an opportunity to the country of the importing party to satisfy itself as to whether the goods are actually originating in the country of its export. Even where the goods are determined as non-originating, in terms of Article 17 (d), the producer/exporter is .....

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in place. As far as fraudulent certificates are concerned, they have been separately dealt with under Article 23. In cases of disputes concerning origin determination, classification of products or other related matters, Rule 24 (a) provides that the Government Authorities concerned in the importing and exporting parties shall consult each other with a view to resolve the dispute, and the result communicated to the other parties . Where no mutually satisfactory solution can be reached through co .....

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ut the method of calculation for the AIFTA content which is identical to Appendix-A to the ASEAN-FTA itself. Significant for the purpose of the present case are Rules 12 and 13 of the Customs Tariff Origin Rules which read as under: 12. Identical and Interchangeable materials - For the purpose of determining origin of a product, when it is manufactured utilising both originating and non-originating materials, mixed or physically combined, the origin of such materials can be determined by general .....

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Certification Procedures as set out in Annexure III annexed to these rules. 42. Annexure III to the Customs Tariff Origin Rules sets out the Operational Certificate Procedures ( OCP ). Rule 7 (c) of the OCP mirrors what is provided in the ASEAN-FTA itself. It also sets out more or less the same time limitation within which the disputes need to be resolved. Rule 7 (c) of the OCP reads as under: 7 (c) In case where an AIFTA Certificate of Origin is not accepted by the Customs Authority of the Imp .....

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on of the provisions set out in Appendix D to the ASEAN-FTA into the domestic law. Failure by Respondents to resort the detailed verification procedure 44. In the present case, the customs authorities first resorted to a retroactive check in respect of some of the COOs produced by importers of gold jewellery from Indonesia. On 12th June 2015 a letter was written by the Municipality Office, Cakung to the Embassy of India in Jakarta in response to the letter dated 7th April 2015 in relation to som .....

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We have verified the contents of their letter from their records and found true and correct. Indonesia has large mining of gold. Most of the formal mines are associated with ANTAM only. As mined gold is used in manufacturing jewellery of aforementioned COO, so the origin of goods is easily verified and hence no pre-exportation verification has been done. It is also to inform you that the exporter is state owned company under the control of Ministry of State Owned Enterprises (Government of Indo .....

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the production process was enclosed. It was stated that P-Antam is a gold miner, refiner, jewellery and minted coins manufacturer. It was a state owned company with the Government of Indonesia holding majority/controlling shares. A list of mines owned by the P-Antam group was also set out. It was categorically stated that the exported goods as well as components/materials used in the production and exports of the goods are only of Indonesian origin and are not of mixed or undetermined origin. Th .....

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proceed on surmises which do not find support in any of the material that has been produced by the Respondents before the Court. For e.g., the impugned Circular proceeds on the basis that in the letter dated 12th June 2015 it was stated that as mined gold is used in manufacturing jewellery of aforementioned COO, so the origin of goods is easily verified and hence no pre-exportation verification has been done. Further, in the letter dated 27th April 2015 it was stated that the gold has been sourc .....

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ia had been used in the production of the gold jewellery that was exported to India. Further such gold was only of Indonesian origin and not of mixed or undetermined origin. Therefore it is inconceivable how the impugned Circular could proceed on the basis that there has been a mixture of gold dore bars of foreign origin with those of domestic origin without maintaining any records of origin. There appears to be confusion regarding gold dore bars. Gold dore bars which are an impure form of gold .....

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. No recourse to such process appears to have been undertaken. The inescapable conclusion is that there was no material for the Respondents to draw the conclusions that form the factual basis of the impugned Circular. Scope of Section 151A of the Customs Act 49. The Court next proceeds to examine if in issuing the impugned Circular and subsequent instructions the Respondents exceeded the scope of their authority under Section 151A of the Act. The proviso (a) to Section 151A of the Act does not p .....

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v. Union of India (supra) would apply to Section 151A of the Act as well. The decision in Union of India v. Madras Steel Re-Rollers Association 2012 (supra) explains that the CBEC is empowered to issue Circulars for the 'guidance of quasi-judicial authorities'. Also in CCE, Vadodara v. Dhiren Chemical Industries (supra) it was explained that the CBEC could disseminate interpretative findings or procedures or such other instructions to its officers for 'ensuring equity and uniformity .....

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ction (2) of Section 66 of the Finance Act, 1994. The said circular clarified that the commission received by distributors on mutual fund distribution would be liable to service tax as it would not fall within the expression 'business auxiliary services'. That circular was struck down on the ground that it amounts to foreclosing discretion or judgment that may be exercised by the quasi-judicial authority while deciding a particular lis under particular circumstances. It was held to be co .....

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ntrary to a Notification statutorily issued has been examined by this Court in several cases. A Circular cannot take away the effect of Notifications statutorily issued. In fact in certain cases it has been held that the Circular cannot whittle down the Exemption Notification and restrict the scope of the Exemption Notification or hit it down. In other words it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down c .....

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ying a beneficial interpretation to the provision in question so as to benefit the assessee and make the application of the fiscal provision, in the present case, in consonance with the concept of income and in particular, notional income as also the treatment of such notional income under accounting practice. 53. Recently in a decision dated 1st February 2016 in Writ Petition (Civil) No. 4665 of 2014 (Allen Diesels India Pvt. Ltd. v. Union of India) this Court noted that Section 151A of the Act .....

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T 127 (Del.) wherein it was held that CBEC cannot impose any condition for availing exemption without amending the original exemption notification. The impugned circulars are ultra vires Section 151A 54. Examined in light of the legal position explained in the above decisions, it is plain that the impugned Circulars dated 6th October 2015 and 20th January 2016 do in fact whittle down the scope of the exemption available for import of gold jewellery from Indonesia, across the board, only because, .....

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officer who is performing a quasi-judicial function. Para 7.1 of the said Circular requires the importers to present facts in support of the COOs, which is not a requirement in the original exemption notification. There is considerable merit in the contention that this goes beyond the mandate of the Customs Tariff Origin Rules and constitutes an unreasonable and onerous condition as far as the importers are concerned. 55. As far as the circular dated 20th January 2016 is concerned, Regulation 2 .....

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the issue of what conditions should be imposed for provisional assessment to the concerned customs officer. It requires the officer to demand 100% bank guarantee even in respect of those B/Es which have been provisionally assessed under Section 18 of the Act. It certainly is contrary to proviso (a) to Section 151A inasmuch it dictates to the customs officer in what manner he should complete a provisional assessment. The consequent impugned letter dated 22nd January 2016 came to be issued to M/s. .....

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on v. Union of India (supra): [Whenever any authority is conferred with the power to determine certain questions in judicial and/or quasi judicial manner, the authority is required to exercise the power conferred upon him as per his own discretion. This is the essence of judicial and quasi judicial function. The authority exercising such powers cannot be influenced by any directions, instructions or the Circulars that may be issued by any other agency. Consequently, the Circular issued by the Re .....

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