Anti-dumping duty levy overturned due to customs failure to verify Malaysian certificate of origin under Rule 9

CESTAT Ahmedabad allowed an appeal regarding anti-dumping duty levy on PVC Sheeting Flex Banner imports from Malaysia. The tribunal held that customs authorities failed to comply with Rule 9 of the Customs Tariff Rules, 2011, which requires verification with Malaysia's issuing authority before disputing certificates of origin. Without proper compliance with Rule 9, the Malaysian government-issued certificate of origin cannot be discarded based solely on statements and bills of lading. The tribunal set aside the impugned order, following precedent from Alfakrina Exports case, ruling the entire proceeding vitiated due to procedural non-compliance.

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Issues Involved:

1. Mis-declaration of country of origin to evade antidumping duty.
2. Authenticity and compliance of the certificate of origin.
3. Imposition of penalty under Sections 114A and 114AA of the Customs Act, 1962.

Summary:

1. Mis-declaration of Country of Origin to Evade Antidumping Duty:
The investigation revealed that the appellant imported 33MT of PVC sheeting flex banner from China but mis-declared the country of origin as Malaysia to evade antidumping duty u/s Notification No. 82/2011-Cus dated 25.08.2011. The goods were cleared without paying antidumping duty, making them liable for confiscation u/s 111(m) of the Customs Act, 1962. The adjudicating authority confirmed the demand for antidumping duty and differential customs duty of Rs. 10,63,593/-, along with recovery of interest of Rs. 1,01,310/- u/s 28AA of the Customs Act, 1962, and imposed penalties u/s 114A and 114AA of the Customs Act, 1962.

2. Authenticity and Compliance of the Certificate of Origin:
The appellant argued that the certificate of origin from Malaysia was genuine and not proven false or forged. The Customs Authority did not conduct an inquiry u/s Rule 9 of the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Government of Republic of India and Malaysia) Rules, 2011, which mandates a retroactive check with the issuing authority in Malaysia. The Tribunal held that without compliance with Rule 9, the certificate of origin issued by the Malaysian Government cannot be doubted. This view was supported by previous judgments, including Alfakrina Exports vs. CC - Mundra - 2023 (9) TMI 86-CESTAT AHMEDABAD, which emphasized the necessity of following Rule 9 before discarding the certificate of origin.

3. Imposition of Penalty under Sections 114A and 114AA of the Customs Act, 1962:
The appellant contended that there was no evidence of prior knowledge regarding the alleged movement of goods from China to Malaysia, making the penalties u/s 114A and 114AA unjustified. The Tribunal found that the lower authorities' conclusion that the goods were of Chinese origin was based solely on the bill of lading and various statements, without any discrepancy in the certificate of origin. Consequently, the Tribunal set aside the impugned order, deeming the entire proceeding vitiated due to non-compliance with the prescribed rules.

Conclusion:
The Tribunal concluded that the impugned order was unsustainable and set it aside, allowing the appeal with consequential relief in accordance with the law.

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