SAFTA preferential duty denied where rule-of-origin conditions were unmet and relief could not rest on a new appellate ground.

Preferential customs duty under SAFTA was unavailable where the imported arecanut failed the prescribed rule-of-origin test, including the required four-digit tariff shift and value-addition conditions, so concessional treatment was not sustainable on merits. Relief also could not be granted on a procedural ground not raised in the proceedings below, because an appellate authority cannot uphold or expand relief on an issue beyond the scope of the order under challenge. The impugned appellate order was therefore unsustainable, and the Revenue's challenge succeeded.

---

---

Issues: (i) Whether the importer was entitled to SAFTA concessional rate of duty under the exemption notification; (ii) Whether the appellate authority could allow the claim on a ground not raised in the proceedings below.

Issue (i): Whether the importer was entitled to SAFTA concessional rate of duty under the exemption notification.

Analysis: The relevant rule required the final product to be classified at a four-digit level differently from the non-originating materials, along with the prescribed value-addition conditions. The records showed that the imported arecanut did not satisfy the four-digit change requirement, and the importer therefore did not meet the originating-status conditions for preferential treatment. The allowance of concessional duty was therefore not sustainable on merits.

Conclusion: The importer was not entitled to the concessional rate of duty.

Issue (ii): Whether the appellate authority could allow the claim on a ground not raised in the proceedings below.

Analysis: The appellate authority accepted that the originating conditions were not satisfied, but nevertheless granted relief on the basis that the procedure for challenging the certificate of origin had not been followed. That procedural question was not part of the dispute before it. Relief was thus granted on a new issue outside the scope of the order under challenge, which could not be sustained.

Conclusion: The appellate authority could not grant relief on a ground beyond the scope of the proceedings.

Final Conclusion: The impugned appellate order was unsustainable and the Revenue's challenge succeeded.

Ratio Decidendi: An appellate authority cannot sustain relief on an issue not arising from the order under challenge or beyond the scope of the dispute before it, and preferential customs benefit must be denied where the prescribed rule-of-origin conditions are not met.

---