Preferential customs exemption requires proper verification of Certificate of Origin, not denial for incomplete questionnaire replies.

Preferential customs exemption under Notification No. 046/2011-Cus could not be denied merely because the importer did not fully answer a departmental questionnaire, where a valid Certificate of Origin issued by the competent ASEAN authority had been produced. The notification and ASEAN-India Rules, 2009 required Customs to follow the prescribed verification process if the certificate was not acceptable, including returning it to the issuing authority within a reasonable time and seeking clarification on the grounds of denial. As the certificate was produced and no adverse verification from the issuing authority was obtained, incompleteness in the questionnaire replies could not displace the certificate or justify denial of the exemption.

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Issues: Whether exemption under Notification No. 046/2011-Cus dated 01.06.2011 could be denied merely because the importer did not furnish complete answers to the departmental questionnaire, when a Certificate of Origin issued by the competent authority of the exporting ASEAN country had been produced.

Analysis: The exemption notification extended preferential tariff treatment to goods imported from countries listed in Appendix I, subject to satisfaction of the Customs authority that the goods satisfied the origin requirements under the ASEAN-India Rules, 2009. Rule 13 and Annexure III required a Certificate of Origin, and where such certificate was not acceptable, the Customs authority had to return it to the issuing authority within a reasonable time and communicate the grounds for denial so that clarification could be obtained. The record showed that the importer had produced the original Certificate of Origin, the goods were examined, and the department neither followed the prescribed verification procedure nor secured any adverse clarification from the issuing authority. Mere incompleteness of answers to the questionnaire, particularly on matters stated to be not feasible for the importer, could not by itself displace the certificate or justify denial of the exemption on assumption and presumption.

Conclusion: Denial of the exemption was unsustainable, and the benefit under the notification was available to the importer.

Ratio Decidendi: Where a valid Certificate of Origin is produced under a preferential trade notification, exemption cannot be denied on a mere procedural lapse in replying to a questionnaire unless the prescribed verification mechanism is followed and the certificate is shown to be unacceptable on material grounds.

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