Importer wins appeal on Notification 99/2011-CUS benefits for edible oil imports under SAFTA agreement

CESTAT Kolkata allowed appeals filed by importer regarding denial of Notification No.99/2011-CUS benefits for edible oil imports from Bangladesh under SAFTA. Revenue alleged misuse of duty exemption through inflated values and supplier connivance. Tribunal held no evidence of kickbacks or value inflation, exporter properly processed crude oil from Malaysia/Indonesia into refined palm olein, and country of origin certificates were genuine with valid verification reports. No SAFTA violations established as machinery export to Bangladesh manufacturer was permissible. Duty demand, confiscation, and penalties set aside with consequential relief granted.

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Issues Involved:
1. Entitlement to benefit of exemption under Notification No.99/2011-CUS dated 09.11.2011.
2. Allegation of connivance between appellants and Bangladeshi suppliers.
3. Validity of the certificate of origin issued under SAFTA Rules.
4. Comparative value of goods imported directly from Malaysia/Indonesia versus those routed through Bangladesh.

Summary:

1. Entitlement to Benefit of Exemption:
The appellants challenged the denial of the benefit of Notification No.99/2011-CUS dated 09.11.2011. The issue centered on whether the appellants were entitled to customs duty exemption under SAFTA for importing RBD Palm Oil from Bangladesh. The appellants argued that the goods were processed and value-added in Bangladesh, and they had valid country of origin certificates.

2. Allegation of Connivance:
The initial allegation was that the appellants were in connivance with Bangladeshi suppliers to inflate the value of imported goods to claim undue benefits. However, the Tribunal found no incriminating evidence in the recovered documents and emails to support this allegation. The Tribunal also noted that there was no prohibition under SAFTA against exporting machinery to a manufacturer in Bangladesh for processing goods.

3. Validity of Certificate of Origin:
The Tribunal emphasized that the certificate of origin issued by the exporter and verified by the Deputy Director, EPB, Bangladesh, was genuine and correct. It was noted that the Revenue did not allege that the certificates were fake. The Tribunal cited previous decisions affirming that certificates of origin issued by designated authorities under SAFTA Rules cannot be rejected unless proven fake.

4. Comparative Value of Goods:
The Tribunal acknowledged that the value of goods imported directly from Malaysia or Indonesia was lower than those routed through Bangladesh. However, it was established that the goods were indeed processed in Bangladesh, justifying the higher value. The Tribunal concluded that the processing and subsequent export of RBD Palm Olein from Bangladesh were legitimate and in compliance with SAFTA Rules.

Conclusion:
The Tribunal held that the appellants were entitled to the benefit of exemption Notification No.99/2011-CUS dated 09.11.2011. The impugned proceedings were set aside, and no penalties were imposed on the appellants. The appeals were allowed with consequential relief.

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