2024 (1) TMI 201 - HC - Customs

Verification of Certificate of Origin Must Be Completed in 30 Days for Areca Nut Imports; Provisional Release Conditions Set.

The HC directed the respondents to complete the verification of the certificate of origin within thirty days. If found genuine, the imported areca nuts ... Provisional assessment under Section 18 of the Customs Act, 1962 - Verification of certificate of origin and authenticity - Release of goods against bond without insisting on a bank guarantee - Security for difference between provisionally assessed duty and preferential duty claimed under Section 28DA - Balancing revenue protection with clearance of perishable consignmentsVerification of certificate of origin and authenticity - Provisional assessment under Section 18 of the Customs Act, 1962 - Balancing revenue protection with clearance of perishable consignments - Respondents must complete verification of the certificate of origin within a fixed time and release goods if certificate is found genuine; if not genuine, respondents may proceed in accordance with law. - HELD THAT: - The court acknowledged the revenue concern arising from reported manipulation of certificates of origin but observed no material to suggest the petitioner had engaged in such manipulation in this case, and noted the perishable nature of the goods increases risk of deterioration. Weighing the competing interests, the court directed that verification be concluded expeditiously and fixed a maximum period of thirty days for completion of verification. If on verification the certificate is found genuine, the goods are to be released without insisting on payment of duty; if the certificate is not genuine, the respondents remain entitled to take further action as permitted by law. The direction reflects the court's effort to balance the need for revenue protection with the practical urgency of clearing perishable consignments. [Paras 8, 9]Verification to be completed within thirty days; genuine certificate - release without duty; non-genuine certificate - respondents to take action in accordance with law.Release of goods against bond without insisting on a bank guarantee - Security for difference between provisionally assessed duty and preferential duty claimed under Section 28DA - If verification is not completed within thirty days, petitioner entitled to provisional release of goods on furnishing a bond for 100% of the value of goods without requirement of a bank guarantee; further action to follow verification outcome. - HELD THAT: - Recognising the elapsed time since import and the perishable nature of the consignment, the court directed provisional release as an interim measure where verification is not completed within the stipulated thirty-day period. The petitioner may obtain provisional release by executing a bond for the full value of the goods without being compelled to furnish a bank guarantee. Upon completion of verification, the respondents' further action is to follow the result of that verification, consistent with the statutory framework permitting security for the difference between provisionally assessed duty and preferential duty claimed. [Paras 9]If verification not completed within thirty days, provisional release on bond for 100% of value without insisting on a bank guarantee; subsequent action governed by verification outcome.Approval by food safety authorities as condition of release - Release of the goods in all situations is subject to approval by the relevant food safety authorities. - HELD THAT: - The court made clear that irrespective of the outcome of verification or the provisional release on bond, clearance and release remain conditional upon the approval of the competent food safety authorities, thereby safeguarding public health considerations alongside customs processes. [Paras 9]Release subject to approval by relevant food safety authorities.Final Conclusion: Writ petition disposed directing respondents to conclude verification within thirty days and release goods if the certificate of origin is genuine; if verification is not completed in that period, petitioner may obtain provisional release on a bond for 100% of the value without a bank guarantee; release in all cases subject to food safety approval; no order as to costs. Issues Involved:1. Challenge to conditions imposed on provisional assessment of Bill of Entry No.6570809 and seeking release of imported goods.2. Dispute regarding the genuineness of the certificate of origin for areca nuts imported from Sri Lanka under a free trade agreement.3. Interpretation of provisions under the Customs Act, 1962 for provisional assessment and verification of goods.Summary:The petitioner, an importer of areca nuts, challenged the conditions imposed on the provisional assessment of Bill of Entry No.6570809 and sought the unconditional release of the imported goods. The petitioner claimed that the goods were exempt from customs duty under the India-Sri Lanka free trade agreement, supported by a certificate of origin from the Department of Commerce, Sri Lanka. The petitioner alleged that stringent conditions were imposed due to doubts about the certificate's authenticity, leading to the filing of a writ petition.The petitioner's counsel argued that the certificate of origin contained a QR Code, which could be verified in real time, as confirmed by the High Commission of Sri Lanka. Referring to a circular by the Central Board of Indirect Tax and Customs, it was emphasized that verification should not be mechanical, especially if goods are from the same manufacturer without modifications. Previous judgments were cited to support the petitioner's request to clear the goods without a bank guarantee.In response, the senior standing counsel for the respondents, Directorate of Revenue Intelligence (DRI), highlighted concerns about fabricated certificates of origin for imports from Sri Lanka. Provisional assessment under the Customs Act, 1962 was justified, allowing further inquiry even with all necessary documents. The counsel pointed out provisions enabling verification and release of goods upon furnishing security for the duty difference claimed.The Court acknowledged the need to balance revenue interests with the petitioner's request for expedited clearance of goods. It directed the respondents to conclude the verification process within thirty days, releasing goods without duty if the certificate is genuine. If verification is inconclusive, provisional release against a bond without a bank guarantee was allowed. The release of goods was made subject to approval by food safety authorities, with no costs imposed. The connected motions were closed as per the order.