2024 (10) TMI 1139 - AT - Customs

CESTAT allows ASEAN FTA benefits on coal imports despite certificate corrections without proof of invalidity

M/s. Devendran Coal International Pvt. Ltd. Versus Commissioner of Customs (Imports), Chennai

CESTAT Chennai held that denial of ASEAN FTA concessional BCD rate on steaming coal imports due to alterations in country-of-origin certificate was ... Classification of goods - steaming (non-coking) coal in bulk - non-submission of country-of-origin certificate - Benefit of concessional rate of BCD under ASEAN FTA Preferential Tariff Agreement - HELD THAT:- There was an alteration / correction made in the COO certificate which was did not satisfy the provisions of procedure 9 of operational certification procedures for the Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement Between the Government of Member States of the Association of South East Asian Nations (ASEAN) and the Republic of India) Rules 2009. It is felt that denying substantial benefits only for technical errors would not do justice to the appellant. While the authenticity of COO is doubted by revenue on this score, nothing concrete has been mentioned in the impugned order to justify the doubt, except for the correction made and the date of the COO certificate being after the date of shipment. Doubt is not a substitute for proof. There is no other taint on the validity of the certificate. The procedure mentioned in the Rules to check any doubt regarding the COO certificate was not followed. The impugned order is set aside and the appeals are allowed. Issues:- Classification of goods under Customs Notification- Benefit of concessional rate of BCD under ASEAN FTA Preferential Tariff Agreement- Rejection of country-of-origin certificate- Authentication of alterations in the certificate- Doctrine of substantial complianceClassification of Goods under Customs Notification:The case involved the classification of goods declared as 'steaming (non-coking) coal' in bulk under CTH 2701.1920 and the assessment of 5% basic customs duty in accordance with Customs Notification No. 21/2002 Sl. No. 70. The appellant claimed the benefit of a concessional rate of BCD at 3% under Notification No. 153/2009 as amended by Customs Notification No. 135/2010 under the ASEAN FTA Preferential Tariff Agreement. The lower authority held that the 5% basic customs duty was not in order as the benefit of the concessional rate had not been claimed by the importer at the time of finalization.Rejection of Country-of-Origin Certificate:The issue arose from the rejection of the country-of-origin certificate submitted by the appellant. The certificate was not issued within the specified timeframe and did not contain the words 'issued retroactively' as required. The lower authority held that the certificate was not submitted in accordance with the provisions of the Customs Tariff, leading to the denial of the benefit under Notification No. 153/2009-Cus.Authentication of Alterations in the Certificate:The appellant's submission of the country-of-origin certificate with the later addition of 'issued retroactively' raised concerns regarding erasure or superimposition, as per the AIFTA-ASEAN Rules, 2009. The respondent argued that the authenticity of the certificate was doubtful due to the lack of required signatures on the amended certificate. The impugned order upheld the rejection of the certificate based on the procedural requirements for alterations in the certificate.Doctrine of Substantial Compliance:The appellate tribunal considered the doctrine of substantial compliance in evaluating the technical errors in the certificate. While the revenue doubted the authenticity of the certificate, the tribunal emphasized that doubt alone is not sufficient grounds for rejection. The tribunal cited the doctrine as a judicial invention aimed at avoiding hardship in cases where minor errors do not undermine the essence of the requirements. Relying on a Constitutional Court judgment, the tribunal set aside the impugned order and allowed the appeals, emphasizing the goal of justice in jurisprudence.This comprehensive analysis of the judgment highlights the key issues surrounding the classification of goods, the rejection of the country-of-origin certificate, the authentication of alterations in the certificate, and the application of the doctrine of substantial compliance in the decision-making process.