TMI Blog2024 (5) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... rina Exports [ 2023 (9) TMI 86 - CESTAT AHMEDABAD] wherein this Tribunal considering the various judgments and Rule 9 of Customs Tariff (Determination of Origin of Goods under the Preferential Trade agreement between the Government of Republic of India and Malaysia) Rules, 2011 held that without compliance of Rule 9, the certificate of origin cannot be discarded. It is settled that without complying the provisions of Rule 9 of Custom Tariff (Determination of Origin of Goods under the Preferential Trade agreement between the Government of Republic of India and Malaysia) Rules, 2011 the certificate of origin issued by Malaysia Government cannot be disputed. Accordingly, the entire proceeding is vitiated. Accordingly, we are of the view that the impugned order is not sustainable. Hence, the same is set aside. Appeal is allowed with consequential relief, if any, in accordance with law. - HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. C L MAHAR Shri Vikas Mehta Consultant for the Appellant Shri Rajesh K Agarwal, Superintendent (AR) for the Respondent ORDER RAMESH NAIR This appeal is directed against the Order-In-Appeal No. MUN-CUSTM-000-APP-224- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trary to the certificate issued by the designated authority from Malaysia. Hence, the same is not sustainable. 2.1 He further submits that there is no evidence to establish the prior knowledge on the part of the appellant regarding alleged movement of goods from China to Malaysia before arriving Mundra. Hence, penalty under Section 114 A and 114 AA is unjustified. He further submits that in case of any doubt about the authenticity of the certificate of origin, Rule 9 of Customs Tariff (Determination of Origin of Goods under the Preferential Trade agreement between the Government of Republic of India and Malaysia) Rules, 2011 needs to be complied with. However, in the present case no inquiry was conducted under the said Rule, therefore, no doubt can be raised on the certificate of origin issued by the statutory authority of Malaysia Government. Therefore, without carrying out the compliance of Rule 9 of Rules 2011, the Customs Authority cannot arbitrarily hold the certificate of origin is not authentic. In support of his submission he placed reliance on the decision of this Tribunal in the case of Alfakrina Exports vs. CC Mundra 2023 (9) TMI 86- CESTAT AHMEDABAD. 3. Shri Rajesh K Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of certificate of origin of originating country i.e. Malaysia. However, it is admitted fact that the investigating agency has not complied with the of Customs Tariff (Determination of Origin of Goods under the Preferential Trade agreement between the Government of Republic of India and Malaysia) Rules, 2011. Therefore, merely on the basis of any other material such as various statements and bill of lading, the certificate of origin issued by the Governmental Authority of Malaysia cannot be doubted. The identical issue has been considered by this Tribunal in case of Alfakrina Exports (Supra) wherein this Tribunal considering the various judgments and Rule 9 of Customs Tariff (Determination of Origin of Goods under the Preferential Trade agreement between the Government of Republic of India and Malaysia) Rules, 2011 held that without compliance of Rule 9, the certificate of origin cannot be discarded. The order is reproduced below:- 4. We have carefully considered the submission made by both the sides and perused the record. In the present case undisputed fact is that the proper authority i.e. Malay Chamber of Commerce Malaysia has issued the certificate of origin. The authenticity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken the following view: 4. Heard both sides and perused the records of the case. The issue involved in the present appeal is 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. 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. Required certificates of origin with respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. To the said effect is the judgment of the Calcutta High Court in the case of Asiatic Oxygen Ltd. (supra) in which it was held that the object behind the specific Heading 98.01 in Customs Tariff Act, 1975 was to promote industrialization and, therefore, the heading was required to be interpreted liberally. It was further held that, once an essentiality certificate was issued by the Sponsoring authority, it was mandatory for the Revenue to register the contract. 4.2 Karnataka High Court in the case of Yellamma Dasappa v. Commissioner of Customs, Bangalore (supra) also observed as follows:- 9. A valid certificate has been issued and the said certificate, even as on date, has not been withdrawn or cancelled for any alleged violation of the condition by the appellant. Unless the said certificate is cancelled, the Customs Authorities cannot impose customs duty. The seizure of the equipment is only a consequential act that would follow the cancellation of the certificate issued in favour of the appellant. So long as the certificate is not cancelled, the respondents could not, in our opinion, have initiated seizure proceedings in the case on hand. Petitioner-appellant was sent only a qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith reference to the various evidences submitted by the Revenue his office is in agreement with the clarification given by the appellant that their annual installed capacity was 1,98,000 M.T. and they were capable to produce 25% extra, which comes to 2,47,500 T.P.A., for which there was no restriction from the Government end. We have noted that all the evidences available with the Department have been submitted to the Commissioner of Industries who reiterated the certificate already issued. In spite of such confirmation by Commissioner of Industries, Madhya Pradesh, the original authority examined the issue of appellants eligibility and held that the appellants have deliberately misdeclared the installed capacity to the Central Excise Department to avail the concessional rate of duty under Notification No. 24/91. The Original Authority observed that the very basis of installed capacity certificate is not correct especially when the capacity of individual machinery/equipment and the various other documents of the appellants themselves suggest that installed capacity of their plant was much more than 1,98,000 T.P.A. Accordingly, he held the appellant is not eligible for the concessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gst the SAARC countries for enhancing, inter alia, the trade between the members contracting countries. Great trust is imposed under SAPTA Rules upon the designated authority of Govt. of the Exporting Contracting State as per para-7 of the Schedule to SAPTA Rules. To fulfill the commitments to SAARC nations a certificate of origin given by exporting contracting state cannot be scuttled by the department by conducting some local investigation creating confusion in extending the exemption benefits. As already observed a certificate of origin issued by the designated authority cannot be dishonoured unless cancelled by the same authority. 5.1. On the issue of processing of cloves it is the case of the department 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. It is correctly argued by the Senior Advocate arguing on behalf of the Appellants that exhausted cloves or spent cloves , from which clove oil has been extracted, will be cheaper than the natural cloves. If the argument of the department on this account is accepted then there cannot be value add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. According to Webster s Dictionary process means to subject to some special process or treatment, to subject (especially raw material) to a process of manufacture, development or preparation for the market, etc., to convert into marketable form, as livestock by slaughtering, grain by milling, cotton by spinning, milk by pasteurising, fruits and vegetables by sorting and repacking. (1) [1964] 15 S.T.C. 450 (S.C.); A.I.R. 1964 S.C. 1006. (2) [1963] 14 S.T.C. 355 (S.C.); A.I.R. 1963 S.C. 928. (3) [1969] 2. S.C.C. 710 (4) [1959] 10 S.T.C. 500. According to Chambers s Twentieth Century Dictionary, process , interalia, means to prepare, (e.g., agricultural product) for marketing. In the Oxford English Dictionary, Vol.VIII, process has been defined to mean besides other things, to preserve fruit, vegetable, etc. by some process . In Webster s New International Dictionary, Vol.II, besides other things, process has been defined to mean a course of procedure, something that occurs in the series of actions . Now, it is common knowledge that the onion has its roots under the earth with coats of bulbs also and its leaves sprout on the surface of the earth. It is removed a long with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition is not fulfilled. We have perused all the three reports which are on record. We note that none of these reports by Sri Lankan customs give any indication about the value addition not being fulfilled by the Sri Lankan supplier. To this extent, there is no factual support for the observation made in the impugned order. Further, we note that the valuation of Zinc Ingots as ascertained by the impugned order has no relevance to question the certificate issued by the Competent Authority of Sri Lankan Government. As such, we find the non-fulfilment of condition under Rule 7 (a) could not be invoked by the Original Authority, in the facts of this case. Further, it is also recorded by the Original Authority that the Director of the importing Indian company in the statements gave details which supported the allegation of incorrect data submitted by the Sri Lankan supplier. We note that there is no such admission by the Director in his statements. Even otherwise, we note that certificate of origin and the data submitted to get such certificates cannot be questioned based on statements of the importers. We find no record to the effect that the country of origin certificates issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Origin of Goods under the Preferential Trade Agreement between the Governments of Member States of Association of Southeast Asian Nations (ASEAN) and the Republic of India] Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 189/2009-Customs (NT), dated the 31st December 2009. 7. I further observe that this Notification is an amendment of earlier Notification No. No. 189/2009-Customs (NT), dated the 31st December 2009. Rule 13 thereof reads as follows: 13. Certificate of Origin.- Any claim that a product shall be accepted as eligible for preferential tariff treatment shall be supported by a Certificate of Origin as per the specimen in the Attachment to the Operational Certification Procedures issued by a Government authority designated by the exporting party and notified to the other parties in accordance with the Operational Certification Procedures as set out in Annexure III annexed to these rules. Perusal of the said Annexure III condition No. 7 therein is with respect to the issuance of said certificate of origin. It reads as follows:- 7. ISSUANCE OF AIFTA CERTIFICATE OF ORIGIN (a) The AIFTA Cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds for the denial of preferential tariff treatment. Admittedly and apparently, the said procedure has not been followed by the Department. Though all the questions were not answered by the appellant but perusal of the questionnaire shows that the availability of information as was required under these questions was not feasible with the appellant. More so, appellant had handed over the original copy of Country of origin Certificate. The meaning of not answered the questionnaire becomes utmost irrelevant in the light of Certificate of origin. 9. No inquiry as mandated by the Notification was conducted with respect to Country of origin Certificate which otherwise reveal that a Certificate has been issued by the Competent Authority of one of ASEAN country as mentioned under Appendix I of the Notification No. 46/2011 dated 01.06.2011. In the given circumstances, it was highly unacceptable that the Certificate should not have been accepted. Once all documents as required under Notification No. 046/2011-Cus dated 01.06.2011 have been provided by the importer and their authenticity has not been challenged by the verifying Customs officers nor got verified from the issuing authority, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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