TaxTMI 
TaxTMI 
2024 (5) TMI 576
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....oyabean oil from non-SAFTA countries by routing it through Bangladesh, and importing such goods in India through different Land Customs Stations (LCS), namely Ghojadanga LCS, Mahadipur LCS and Petrapole LCS, all in the state of West Bengal, by mis-using the provisions of SAFTA (South Asian Free Trade Agreement) with an intent to illegitimately claim Customs duty exemption. 3. It was further found that the actual originating countries of these imports were mainly Malaysia and Indonesia, both countries being major producer-suppliers of different Palm oil products. These edible oils, after being imported into Bangladesh, were then supplied to India as such, or with minimal processing in Bangladesh, which is not sufficient to claim originating status under the SAFTA Agreement. Almost all such imports were undertaken after increase in Customs duty on these items in 2018. As per intelligence inputs, the price of Refined Palm Olein/RBD Palm Olein supplied from Bangladesh was intentionally inflated by the Bangladeshi supplier, in connivance with the Indian importers, in order to fraudulently show the prescribed minimum domestic value addition that is supposed to be done in the exporting s....
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....nts have claimed exemption as per SAFTA on issuance of the country of origin certificate by the supplier. It is his contention that the DRI has alleged that the SAFTA certificate issued by the EPB, Bangladesh is without following the procedure prescribed under the Rules of Determination of Origin of Goods under the agreement on SAFTA hence exemption ought not to have been granted. 9. Further, it is alleged that the appellant is in connivance with the supplier namely M/s. SG Oils. This allegation was made on the basis of the recovery of certain e-mails wherein purportedly the appellant has agreed to sign a Letter of Indemnity on behalf of the said SG Oils. Secondly, the appellant has also agreed to open a letter of credit on behalf of SG Oils. It was also alleged by the DRI that the appellant has exported the machine to the exporter M/s. SG Oil and it is also alleged that against the tariff value of RFD Palm Oil fixed by the Indian Government between USD 597 to USD 709, in respect to the subject imports made by the appellant from SG Oils, the value declared was ranging between USD 925 to USD 1125. 10. It is his contention that in terms of SAFTA Rules of Origin, the supplier of the....
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....desh for manufacturing of the goods in question. Therefore, on the basis of that it cannot be alleged that the appellant has violated any provisions of SAFTA under the Customs Act, 1962. 17. We further take note of the fact that the value of the goods imported from Malayasia or Indonesia directly is much lower than the value shown by the supplier/exporter from Bangladesh of the goods in question. 18. We find that the it is a fact on record that the exporter has imported crude palm oil from Malayasia/Indonesia and processed the same and after processing the same has been converted to RBD Palm Oline and cleared to the appellant. Definitely, the price after processing has been higher than crude oil imported by the exporter from Malayasia or Indonesia. It is not the case of the Revenue that the exporter in Bangladesh have not processed the goods and cleared as such to the appellant. It is a fact on record that the supplier in Bangladesh has imported crude oil form Malayasia/Indonesia and processed the same and exported to the appellant RBD Refined Palm Olein, therefore, it cannot be alleged that the supplier/exporter has not processed the goods. 19. Further, the supplier has issued ....
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....lant where percentage of value addition as per SAPTA Rules was also indicated. Adjudicating authority has not accepted the value addition indicated in the certificate of origin but has gone with the investigation indigenously to allege that value addition cannot be to the extent claimed by the Appellant and also that activities undertaken by the supplier of cloves does not amount to 'processing' of cloves. It is observed from various provisions of SAPTA Rules and Notification No. 105/99-Cus., dated 10-8-1999 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. 4.1 It is also observed that Hon'ble Apex Court in the case of Zuari Industries Ltd. v. CCE & Cus. (supra) held as follows :- "9. Firstly, on the facts we find that the assessee had given to the Sponsoring Ministry its entire Project Report. In that report they had indicated that for the expansion of the fertilizer project they needed an extra item of capital goods, namely, 6MW Captive Power Plant. In their application, the asses....
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....aid questionnaire has been answered by the appellant herein. No further action has been taken by the respondents. The Director General of Health Services has also not issued any cancellation of certificate as on date. In these circumstances, we are clearly of the view that without withdrawing or cancelling the certificate already issued, the present seizure cannot stand. Therefore we hold that the seizure effected by the respondents is not in accordance with law. The impugned order of the learned Single Judge, in these circumstances, requires to be set aside and accordingly the same is set aside." 4.3 CESTAT, Delhi in the case of Dhar Cement Ltd. v. CCE Indore (supra) after relying upon case laws of Supreme Court and Karnataka High Court, held as follows :- "7. We have heard both sides and examined the appeal records. This is the third round of litigation in the present case. The issue involved is the installed capacity of the appellant vis-à-vis their eligibility to Notification Nos. 24/91 and 5/93-C.E. The concession of notification is available when the installed capacity is not exceeding 1,98,000 T.P.A. It is admitted fact that the Director of Industries, Madhya Pr....
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....ind that while coming to such conclusion he has acted apparently, as appellate authority with reference to certificate issued by the competent authority in terms of the notification. We find the original authority has no such legal powers to sit on judgment on the certificate issued by the competent authority designated by the Government. In case the certificate was obtained by misrepresentation or not presenting full facts the only option left to the Department is to approach the competent authority with all the evidences to modify/cancel the certificate issued already. The Department did approach not only the Director of Industries but also Commissioner of Industries with all the evidences which were examined and the certificate was reiterated by the competent authority. As already noted, no other evidence was left to be considered." 4.4 In view of the above observations and the ratios laid down by the Courts 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. 5. Adjudicating authority has relied ....
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....addition in the making of processed cloves and Notification No. 105-99-Cus., dated 10-8-1999 will become redundant, so far as concession/exemption to imported cloves from SAPTA countries is concerned. 5.1.1 On this issue of processing Gauhati High Court vide Order dated 30-8-1978, in the case of Chandeswar Singh v. State of Assam [1978 (42) STC 424 (Gau.)], held that when leaves and roots are removed from the onions then such onions become processed onions. Following observations were made by Hon'ble Gauhati High Court :- "To put the argument of the learned counsel in nutshell, his contention is that a person who sells onion produced in Assam is not a dealer inasmuch as onion is neither manufactured nor made nor processed. On this assumption, contends the learned counsel, that levy of sales tax on onion imported from outside the State of Assam is hit by article 301 of the Constitution which deals with freedom of trade, commerce and intercourse throughout the territory of India. It is argued that article 304(a) cannot come to the rescue of the State for justifying this levy inasmuch as article 304(a) provides that the legislature of a State may by law impose on goods imported ....
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....he surface of the earth. It is removed along with the root, the leaves are dried up, and the main part which may be called bulb is exposed in the sunshine and after the leaves have dried up and have been removed from the bulb, the bulb, i.e., the edible round article is taken to the market for sale. From this it will be clear that the commodity is subjected to a treatment or process. It does not remain in the same condition in which it was when embedded to the earth or as initially harvested. Looked at from this angle, we are inclined to hold that onion is processed and that is why the onion grown in the State of Assam has been rightly subjected to a levy of sales tax by the Government." 5.2 In view of the above case law of Gauhati High Court department cannot sit as on Adjudicator over the certificate of origin given by the designated authority under SAPTA Rules. Only an appropriate authority of Bangladesh could have certified as to what could 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, e....
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....e with conditions in the Rules and to the satisfaction of 'respective Government Authorities designated to issue the Certificate of Origin.' It is the case of the appellants that, with furnishing of that certificate, compliance with conditions on the part of the exporter is natural assumption to be contradicted only in accordance with the mechanism of the Rules. The case of Revenue is that the Department of Foreign Trade, Government of Thailand has not authenticated most of the certificates and the few that were, are also as unacceptable. 12. In terms of rule 4 of Interim Rules of Origin and, on the common ground of neither gold nor diamonds being mined in Thailand, reference to '(b) products not wholly produced or obtained in the territory of the exporting Party provided the said products are eligible under Rule 6 or Rule 7, and Rule 8.' therein circumscribes the deeming of Thailand as origin of the impugned goods. Insofar as rule 8 of Interim Rules of Origin is concerned, there is no allegation of non-compliance and the eligibility arises from certification that has been issued as adhering to rule 6 or rule 7 of Interim Rules of Origin. There is also no allegation tha....
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....rtificates while advising on apparent ineligibility of these 59 certificates for some noncompliance. This misinterpretation by the overseas mission appears to have informed the proceedings culminating in the impugned order. That, however, does not suffice to negate the entirety of the certificates or even the 59 in the absence of details for computation of the 'local value added content' in rule 6 of Interim Rules of Origin. 15. In re RS Industries (Rolling Mills) Ltd, it has been held that '6. In any case, para 38.3 of the impugned order refers to nonfulfilment of condition under Rule 7(a) of Origin Rules. Reliance was placed on reports given by Sri Lankan customs dated 31-12-2004, 8- 2-2005 and 5-4-2005 to conclude that the domestic value 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 questio....
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....f facts. We have perused the impugned order. We note that there is a basic contradiction in the findings recorded. After careful examination of the available details, the Original Authority categorically held that the goods were not of Chinese origin and as such, anti-dumping duty cannot be levied on them, which is otherwise leviable if the goods are of Chinese origin. Having recorded thus, the Original Authority proceeded to hold that the appellant is not eligible for preferential rate though admittedly, the goods have originated from Sri Lanka. In other words, the goods were held to be of not Chinese origin and also not of Sri Lankan origin. In other words, we note that it is clear that the question of country of origin of the present goods is left hanging without a finding by the Original Authority. The goods were neither of Chinese origin nor of Sri Lankan origin. We note that the same is not a tenable position. 8. The Original Authority has apparently exceeded the jurisdiction in going into the aspects of possible classification of inputs used by the supplier in the manufacture of impugned goods in Sri Lanka. Holding that one of the input and the final product fall under th....
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....e with the investigation indigenously to allege that value addition cannot be to the extent claimed by the Appellant and also that activities undertaken by the supplier of cloves does not amount to 'processing' of cloves. It is observed from various provisions of SAPTA Rules and Notification No. 105/99-Cus., dated 10-8-1999 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. 4.1 It is also observed that Hon'ble Apex Court in the case of Zuari Industries Ltd. v. CCE & Cus. (supra) held as follows :- "9. Firstly, on the facts we find that the assessee had given to the Sponsoring Ministry its entire Project Report. In that report they had indicated that for the expansion of the fertilizer project they needed an extra item of capital goods, namely, 6MW Captive Power Plant. In their application, the assessee had made it clear that the fertilizer project was dependant on continuous flow of electricity, which could be provided by such Captive Power Plant. Therefore, it was not open to the Re....
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....on of certificate as on date. In these circumstances, we are clearly of the view that without withdrawing or cancelling the certificate already issued, the present seizure cannot stand. Therefore we hold that the seizure effected by the respondents is not in accordance with law. The impugned order of the learned Single Judge, in these circumstances, requires to be set aside and accordingly the same is set aside." 4.3 CESTAT, Delhi in the case of Dhar Cement Ltd. v. CCE Indore (supra) after relying upon case laws of Supreme Court and Karnataka High Court, held as follows :- "7. We have heard both sides and examined the appeal records. This is the third round of litigation in the present case. The issue involved is the installed capacity of the appellant visà- vis their eligibility to Notification Nos. 24/91 and 5/93-C.E. The concession of notification is available when the installed capacity is not exceeding 1,98,000 T.P.A. It is admitted fact that the Director of Industries, Madhya Pradesh, who is designated as a competent authority in the Notification itself has more than once certified the installed capacity of the appellant to be 1,98,000 T.P.A. As observed by the H....