Customs Duty Challenge Succeeds: Alkalised Cocoa Powder Import Exempted Due to Time-Barred Notice Under Section 28

Tribunal allowed appellant's appeal challenging customs duty demand for Alkalised Cocoa Powder imported from Malaysia. The demand was found time-barred under Customs Act, 1962, as show cause notice was issued beyond limitation period. Tribunal noted lack of strict compliance with retroactive check and upheld Country of Origin certificate, thus setting aside the original order imposing duty and penalty.

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Issues involved: Alleged wrong availment of Country of Origin benefit, demand of differential customs duty, imposition of penalty under Customs Act, 1962, time limitation for demand of custom duty.

Summary:
1. The case involved the appellant importing Alkalised Cocoa Powder from Malaysia and claiming FTA benefits under Custom Notifications. A Show Cause Notice was issued proposing demand of differential customs duty based on the alleged wrong availment of Country of Origin benefit. The subsequent appeal against the demand of duty, interest, and penalty was rejected by the Appellate Commissioner, leading to the appeal before the Appellate Tribunal.

2. The appellant argued that the demand of Custom Duty with interest was beyond the limitation period specified under the Customs Act, 1962. They contended that the country of origin criteria specified under Customs Notification covered the imported goods, making them eligible for concessional duty. The appellant also highlighted that the customs authority did not have the power to reject the Certificate of Origin (COO) issued by the designated authority unless it was canceled by the same authority.

3. The appellant further argued that the retroactive check process was not fully complied with, and the exporting country did not invalidate the COO. They cited relevant judgments to support their position. On the other hand, the revenue department reiterated the findings of the impugned order.

4. Upon careful consideration, the Tribunal found that the appeal could be disposed of on the threshold point of the time bar. The Tribunal observed that the certificate of origin was provided by the exporting country, and the appellant had no control over it. The show cause notice was issued beyond the normal period of limitation, and there was no strict compliance with the retroactive check. Consequently, the demand was held to be hit by the limitation, and the impugned order was set aside, allowing the appeal.

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