2023 (11) TMI 530 - AT - Customs

Third-party invoicing permitted under trade agreement for imported coal, minor invoice discrepancies don't invalidate preferential benefits

CESTAT Chennai allowed the appeal regarding rejection of Preferential Trade Agreement benefits for imported steaming non-coking coal. The tribunal held ... Rejection of the benefit of Preferential Trade Agreement - Steaming Non-Coking Coal imported by the appellant - rejection on the ground that invoice has been raised by the third party country - rejection also on the ground of difference in the invoice number as noted in the Country of Origin Certificate compared to the invoice issued by the Dubai supplier. Rejection on the ground that invoice has been raised by the third party country - HELD THAT:- On perusal of the Preferential Trade Agreement, it is found that it allows the invoice to be issued by a third party country - the rejection of the benefit of the Notification on this ground cannot sustain and requires to be set aside. The second ground for rejection is that there is a difference in the invoice number as noted in the Country of Origin Certificate compared to the invoice issued by the Dubai supplier - HELD THAT:- On perusal of the invoice, it is found that along with the number of the invoice there is an addition of the letters A and B in the invoices issued by the Dubai, UAE supplier. It is understood that the invoices were split into two for the convenience of the quantity of the goods exported and for issuing the Country of Origin Certificate respectively. These discrepancies do not have any bearing to the benefit under the Preferential Trade Agreement. The Ld. counsel has been able to give plausible explanation for the minor difference in the invoice numbers - the rejection of the benefit on the second ground also cannot sustain and requires to be set aside. The impugned order rejecting the benefit of concessional rate of duty as per the Preferential Trade Agreement is not justified. The impugned order is set aside - Appeal allowed. Issues:The judgment involves the rejection of the benefit of Preferential Trade Agreement on imported Steaming Non-Coking Coal based on discrepancies in invoices and the country of origin certificate.Issue 1 - Rejection based on discrepancies in invoices and country of origin certificate:The appellant imported goods from Indonesia but faced rejection of concessional duty under the Preferential Trade Agreement due to discrepancies in invoices. The original authority noted differences between the invoice issued by the supplier in Dubai and the Country of Origin Certificate from Indonesia. The rejection was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.Issue 2 - Arguments for appellant and Department:The appellant's counsel argued that the goods were of Indonesian origin, and the Preferential Trade Agreement allows for supply by a third-party country. The counsel referenced relevant rules under the ASEAN Preferential Trade Agreement to support this claim. On the other hand, the Department's Authorized Representative highlighted the discrepancies in the invoice numbers and supplier names between the invoices and the Country of Origin Certificate.Tribunal's Decision:Upon hearing both sides, the Tribunal found that the rejection of the benefit under the Preferential Trade Agreement was not justified. The Tribunal held that discrepancies in invoice numbers and supplier names did not impact the eligibility for the concessional rate of duty. The rejection based on these grounds was set aside, and the appeal was allowed with consequential relief, if any, as per the law.