Certificate of origin protection limits customs reappraisal of Thai-origin goods and preserves preferential duty relief.

Preferential customs duty under the Thailand-origin notification depended on compliance with the Interim Rules of Origin and production of a valid certificate of origin issued through the prescribed certification mechanism. Indian customs could not generally disregard that certificate by reappraising origin status on the basis of local estimates, recovered documents or statements alone. In the absence of reliable material proving the value of non-originating inputs, and without a proper cancellation or discrediting of the certificates through the prescribed process, denial of the exemption was not justified. The certificates of origin therefore could not be rejected in the manner adopted, and preferential duty relief remained available.

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Issues: Whether the customs authorities could disregard the certificates of origin produced for goods imported from Thailand and deny the benefit of preferential duty under the relevant notification on the ground that the local value addition requirement under the Interim Rules of Origin was not met.

Analysis: The preferential rate was governed by the exemption notification read with the Interim Rules of Origin, under which eligibility depended upon proof of Thai origin in accordance with the prescribed certification procedure. The scheme vested the designated authority in the exporting country with the function of issuing the certificate of origin, and the customs authorities in India were not given a general power to reappraise that certificate on the basis of local estimation, recovered documents, or statements alone. The record did not contain reliable material showing the value of non-originating materials necessary to compute the local value added content under the applicable rule. The retroactive verification material from the Thai authority did not justify discarding the certificates as a whole, and in the absence of a proper cancellation or discrediting of the certificates through the prescribed mechanism, denial of the exemption was not sustainable.

Conclusion: The certificates of origin could not be rejected by the customs authorities in the manner adopted, and the denial of preferential duty was unsustainable.

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