9911796707
TMI Blog2025 (5) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1975 when imported into India from a country listed in Appendix to the notification including Islamic Republic of Afghanistan, subject to the conditions that the importer proves to the satisfaction of the Customs authorities, in accordance with the Rules for determination of origin of Goods under the Agreement on South Asian Free Trade Area (SAFTA), 2006, published vide Notification No 75/2006- Customs, (NT) dated 30.06.2006 (hereinafter referred to as "SAFTA Rules"). 1.2 It is the case of the department that the Appellant has fraudulently imported subject goods of US Origin by mis-declaring the country of origin as Afghanistan in order to wrongly avail the benefit of the Exemption Notification. The allegation was made by the department, relying upon the following: a. Paper Slips/paper Tags stitched/ attached on Bags or found inside the bags containing subject goods mentioned country of origin as USA in 3 out of more than 1600 bags. b. The IPPC office vide email dated 25.12.2019 and 01.01.2020 informed that Phyto Sanitary Certificates (PSC) submitted by the Appellant at the time of import were completely fake. 1.3 Accordingly, show cause notice dated 13.02.2024 was issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid COO issued by the competent authority. Reliance in this regard is placed on the decision of Scientific Suppliers Vs. C.C., Mundra, 2024 (2) TMI 741- CESTAT Ahmedabad, wherein it was held as under: "6. Considered. We find that in the instant case, the certificate was duly got verified through the Government to Government process and Malaysian authorities have not doubted the issuance of genuine certificate of origin nor its contents. However, the department in the absence of cost data has placed the whole burden of proof on the appellants, despite documentary evidence coming to the fore by way of certificate of origin and getting verified by the Malaysian authority. It is clear that the cost data of Malaysian manufacturer having been provided or having been denied is a matter between Government to Government (G to G) and cannot be held against the appellants. In case the agreement between Malaysian Government and Indian Government had some provision for providing cost data of the supplier company, then such condition could have been taken up with the Malaysian Government and if needed the preferential duty agreement got cancelled for breach of Treaty provisions. Failure of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the benefit of preferential tariff treatment is available on the import of goods from SAFTA countries is proved, in that case the exemption benefit can not be denied merely on the allegation that random tags/stickers were found in the imported goods. 2.7 Reliance in this regard was placed on the decision of the Commissioner of Customs, Hyderabad v. Riddi Siddhi Bullions Ltd, 2017 (355) ELT 585 (Tri-Hyd), wherein it was held that when all documents as required under exemption notification, provided and accepted as genuine documents certified and issued by Government authorities, the officer cannot deny the benefit of the exemption notification. ii. Phyto Sanitary Certificate is not relevant in the present case. 2.8 Further, in the entire show cause notice, the allegation levelled against the Appellant is that of forging the phyto certificate. However, the phyto certificate is not a determining factor for deciding the origin of the goods. 2.9 Phyto certificate is a document given by an independent agency that declares that the goods are safe for consumption, and an invalid phyto certificate does not invite payment of duty or interest, or fine as alleged in the show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of BOE no. 3997006 dated 09.07.2019 is not sustainable as Appellants have already relinquished their title of goods. 2.15 Section 28DA of the Finance Act, 2020, dated 27.03.2020, (effective from July 2020) imposes an obligation on the importer to possess sufficient information on Regional Value Content (RVC) and Product-specific criteria specified in the rules of origin under the FTAs. In the present case, majority of the imports were made before June 2020 when there was no obligation on the importer to verify any additional details, apart from submitting the COO. Reliance is placed on the decision of Bullion and Jewellers Association v. UOI- 2016 (335) E.L.T. 639 (Del.), wherein it was held that if imports are made prior to the introduction of Section 28DA, in that case a valid COO at the time of import is sufficient and such import cannot be called into question at a later stage. 2.16 There was no mis-declaration or suppression in the present case, and thus, Section 111(m) is not applicable. Further, Section 111(o) relates to violation of post-import conditions of an exemption notification. Here, the case of the department is denial of exemption due to non-satisfaction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said mobile phones could contain important data relevant to the inquiry. 3.3 Statements of Shri Aakash Nair, Senior Executive of M/s. Winwin Maritime Ltd (Authorised Agent for Shipping Line M/s. Allied Container Line, Karachi) was recorded on 21.10.2019 under Section 108 of the Customs Act, 1962. M/s. Winwin undertook clearances of their containers at Mundra / Kandla ports. After seeing Bills of Lading Nos. ACL/KHI/MUN-1447/19 dated 23.05 2019 and ACL/KHI/MUN-1965/19 dated 27.06 2019 from the documents produced by him and the Phytosanitary Certificates No. 160042 & 1600423 both dated 14.05.2019 and 202493 & 202494 both dated 09.05.2019 and certificate No. 202981 dated 13.05.2019 issued by Plant Protection and Quarantine Department, Ministry of Agriculture, Irrigation and Livestock, Islamic Republic of Afghanistan, he stated that it appeared that the Containers were loaded from Karachi Port Further, perusal of Phythosanitary Certificates revealed that fumigation was done at Kandahar, Afghanistan but the Container Numbers were not mentioned in the Phytosanitary Certificates. That after receiving letter from DRI to submit the documents, he had contacted the persons of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orwarded through courier for filing Bill of Entry and the documents received earlier had not been cross-checked. 3.6 Statements of Shri Ravi Patel, Proprietor of M/s. Uma Trading Company, a wholesale trader of Cashew Nuts, Cumin Seeds, Black Pepper and Walnuts (in shell) etc. was recorded under Section 108 of the Customs Act, 1962 wherein he stated that he came into contact with Shri Suresh Bhatt of M/s. Kesar Spices in June 2019 through some common traders in the market. That Mr. Bhatt had offered to sell some quantity of old California Inshell Walnuts' at a lower rate who also provided some samples. He had purchased around 10000 kgs of Walnuts from Shri Suresh Bhatt on invoices issued by M/s. Kesar Spices in June 2019 and payments were made by RTGS. Thereafter, Shri Suresh Bhatt had informed that one of his known traders M/s V H Traders, Deesa was willing to sell 'California Inshell Walnuts. He had interacted with Shri Vishal of V H Traders and purchased about 5 MTs of California Inshell Walnuts'. 3.7 The two mobile phones seized at the office premises of M/s. Kesar Spices were examined by the Cyber Forensic Laboratory, DRI, Mumbai Zonal Unit, Mumbai under Panchnama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary Certificates and COO Certificates for US origin goods by showing them as originating in Afghanistan to wrongly claim the benefit of Notification No. 99/2011-Cus dated 09.11.2011. 3.11 The Adjudicating Authority found that on the basis of specific inputs regarding wrong claim of Not No. 99/2011-Cus dated 09.11 2011, examination of goods (Walnut in shell) covered under Bill of Entry 3997006 dated 09.07.2019 was conducted under panchnama wherein some incriminating documents in the form of paper slips/paper tags stitched/attached to bags or found inside the bags of walnuts clearly indicating that the goods are of USA origin. The importer, vide letter dated 27.07.2019 voluntarily submitted a Demand Draft for Rs. 87,05,435/- towards payment of duty, interest and penalty in respect of late filing of Bill of Entry in acceptance of their mistake committed regarding mis-declaration of Country of Origin. 3.12 With regard to importer's allegations that the stickers found in the cargo were planted by DRI, the adjudicating authority observed that the said stickers were found during cargo examination in the presence of independent Panchas and authorized representative of the Customs Bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal certification procedures for south Asian free trade area (SAFTA) rules of origin because evidence of transport of goods from Afghanistan to India are not on record. In this regard, there is no dispute that goods are transported from Afghanistan to India through Pakistan. Appellants has submitted documents showing transport of goods from Afghanistan to India. Further, following documents are submitted as evidence in addition to bill of landing submitted by the appellant: a. Bill of export filed at customs house, Chaman, Afghanistan which was assessed by customs officer, at customs house, Chaman, Afghanistan. Said bill of export show truck number, container number also through which goods were transported. b. Corresponding examination report issued by the customs officer of Pakistan and also customs officer of Afghanistan for the said goods during transit through Pakistan. 4.2 In view of above, it was submitted that there is no doubt that goods are transported from Afghanistan to India through Pakistan. 4.3 Without prejudice to above, he submitted that rule 18 of operational certification procedures for south Asian free trade area (SAFTA) rules of origin will not be applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated that the goods were of USA origin which were imported in Karachi from USA but were being shown as having country of origin as Afghanistan. The same was denied at various fora. Again the statement of Aakash Nair, of M/s. Winwin Maritime Ltd was recorded. He was shown Phytosanitary Certificates covering the consignment issued by Plant Protection and Quarantine Department, Ministry of Agriculture, Irrigation and Livestock, Islamic Republic of Afghanistan from which, it appears that the container were loaded in Karachi port. The Phytosanitary Certificates did not mention the container numbers. He also indicated that the container was stuffed from the Badaruddin Yard and loaded from Karachi port. M/s. Allied Container, Karachi however informed that the goods in transit were from Karachi and initially loaded at Afghanistan. Statement of one Ravi Patel, Proprietor of M/s. Uma Trading Company, a wholesale trader, inter alia, of Cashew Nuts was also recorded that Shri. Suresh Bhatt of M/s. Kesar Spices in June 2019 had offered him some quantity for sale of 'California Inshell Walnuts' at lower rate and samples were also provided by Shri. Suresh Bhatt. The D.R.I recovered two mobile p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no shifting of the burden to the other side. Ei incumbit probatio qui dicit, non qui negat (Latin) is the guiding principle to emphasize that the burden of proof lies on the one who asserts, and not on the one who denies. This principle is foundation of both civil and common law system. We find that the importer had claimed concessional rate on the importer goods under SAFTA Agreement and related notification issued under Customs Tariff Act; As per notification, document required for claiming concessional rate of duty was the certificate of origin which was duly produced and in normal course, should have made the importer entitled to concessional rate of duty. We find that slips indicating 'California origin' were found only in three bags out of 1650 bags of Walnuts, which cannot be the basis to say that the whole consignment is of 'California Origin' by any sense of imagination, even if, the yardstick of pre-ponderance of probabilities is applied. We also find that there is no admissible statement as such recorded under Section 108 of the Customs Act, 1962 by the department but there only exists a letter dated 24th July, 2019 which has been relied upon by the department and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities in Afghanistan and got a report in relation to Phytosanitary Certificate which indicated that the same were interpolated or tampered with in relation to columns specially relating to type of treatment given to the consignment. It is clear that origin from Afghanistan is not specifically denied by the authorities there and department's case that consignment moved from USA to Dubai and from there to Karachi port and then to India lacks credence as there is otherwise overwhelming documentary evidence available including examination reports before Karachi Customs and Afghanistan Customs, transit certificate and COO, which have not been denied or proved to be incorrect by the departmental authorities. Coming to the case law as has developed in relation to exemption benefit vis-à-vis the certificate of origin, various case laws quoted by the party come to their defense and supports their case that verified certificate of origin by the relevant authorities under SAFTA is conclusive evidence for claiming the benefit. We find the verified country of origin certificate is sufficient proof of the origin criteria and department cannot ignore this record, without the underlying au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not having originated from Afghanistan. Such evidence could have at the most allowed department to allege ITC violation but cannot be used to deny exemption notification benefit. We also find that the earlier consignment was duly cleared by the department and other is stated to be not cleared till date and might have become Junk and expired food item. In any case, the fumigation as per notification is permitted to be done in either the country of export or the country of import. Such allegation has been made without testing the veracity of the third agency and document collected by it without examining the official by the adjudicating authority or of the authority in the Afghanistan can have co-relation with origin of the country, being Afghanistan only. We find that the country of origin in the face of overwhelming documentary evidence confirmed by Ministry of Finance cannot be overlooked on the basis of mere presumption to be of 'California origin'. 7. In view of the foregoing factual details as well as various case law, we find no reason to sustain order passed on legality of the issue as well as on the basis above stated facts and appreciation of evidence has done by us. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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