Certificate of origin verification is required before denying preferential customs exemption based on suspected genuineness.

Preferential exemption under Notification No. 46/2011-Cus could not be denied merely because the customs department oubted the genuineness of certificates of origin issued by the Malaysian competent authority. The AIFTA Rules required origin to be tested against the prescribed criteria, but the department had to first verify the certificates through the proper foreign authority mechanism before discarding them. As verification was not obtained, the certificates could not be rejected on suspicion alone, and the burden to disprove their genuineness was not discharged. The impugned orders were set aside and the disputes remanded for fresh adjudication after proper verification.

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Issues: Whether the benefit of Notification No. 46/2011-Cus could be denied and duty demanded on the basis of doubt regarding the genuineness of the certificate of origin without obtaining verification from the issuing foreign authority.

Analysis: The exemption under Notification No. 46/2011-Cus was available only if the importer established that the goods satisfied the origin requirements under the AIFTA Rules notified by Notification No. 189/2009-Cus (N.T.). Under Rules 3, 4 and 5(1) of those Rules, originating status depended on the prescribed origin criteria, including wholly obtained goods or goods meeting the regional value content and tariff-shift conditions. The imported goods were supported by certificates of origin issued by the Malaysian competent authority. The finding recorded was that the department proceeded to deny the exemption without first securing verification from the Malaysian authorities regarding the authenticity of the certificates. In the absence of such verification, the certificates could not be discarded merely on suspicion, and the department had not discharged the burden necessary to disprove their genuineness.

Conclusion: The denial of exemption was not sustained on the existing record, and the matter was remanded to the adjudicating authority for fresh verification and decision.

Final Conclusion: The appeals succeeded to the extent that the impugned orders were set aside and the disputes were sent back for fresh adjudication after proper verification of the certificates of origin.

Ratio Decidendi: A certificate of origin issued by the competent authority cannot be rejected for denying preferential exemption unless the customs department first verifies and establishes its infirmity through the prescribed origin-verification procedure.

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