Natural justice and finality of self-assessment bar customs duty denial, retrospective re-assessment, and confiscation without proper verification.

Preferential customs duty under Notification No. 46/2011-Cus. could not be denied on the basis of a departmental letter alone when the underlying verification report on the Certificate of Origin was not supplied to the importer; the resulting adverse finding was treated as contrary to natural justice. For six earlier consignments, exemption could not be retrospectively withdrawn by extrapolating alleged defects in a later Certificate of Origin, because each certificate required specific verification and the original self-assessments had not been challenged or modified in accordance with law. Confiscation and redemption fine were also held unsustainable for goods already finally cleared and no longer physically available.

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Issues: (i) Whether the preferential customs duty benefit under Notification No. 46/2011-Cus. dated 01.06.2011 could be denied on the basis of a FTA Cell communication alleging inauthenticity of the Certificate of Origin, without furnishing the underlying verification report to the importer; (ii) Whether the demand raised in respect of the earlier self-assessed Bills of Entry, together with confiscation and redemption fine, was sustainable in the absence of a challenge to the original assessments and in the absence of availability of the goods.

Issue (i): Whether the preferential customs duty benefit under Notification No. 46/2011-Cus. dated 01.06.2011 could be denied on the basis of a FTA Cell communication alleging inauthenticity of the Certificate of Origin, without furnishing the underlying verification report to the importer.

Analysis: The denial of exemption rested entirely on the FTA Cell communication stating that the Certificate of Origin was inauthentic and referring to an enclosed verification report. The importer repeatedly sought that report, but it was not supplied. Without examining the verification report, the basis on which the issuing authority was said to have disowned the certificate could not be tested. Reliance only on the communication, without the underlying material, would amount to reliance on hearsay and would violate fair procedure.

Conclusion: The denial of the preferential duty benefit on this basis was not sustainable and was set aside in favour of the assessee.

Issue (ii): Whether the demand raised in respect of the earlier self-assessed Bills of Entry, together with confiscation and redemption fine, was sustainable in the absence of a challenge to the original assessments and in the absence of availability of the goods.

Analysis: The earlier consignments had been assessed on self-assessment basis under separate Bills of Entry and were not reopened through any appropriate proceeding against those assessments. The same alleged defect in the later certificate could not, by assumption, be extended to the earlier certificates without specific verification of each import. The demand was therefore unsupported. As to confiscation and redemption fine, the goods were not physically available with the Revenue when the action was taken, and the imposition of fine on that basis could not be sustained.

Conclusion: The demand, confiscation and redemption fine in respect of the earlier consignments were not legally sustainable and were set aside in favour of the assessee.

Final Conclusion: Both appeals were allowed, and the appellant was held entitled to consequential relief as permissible in law.

Ratio Decidendi: An exemption based on a Certificate of Origin cannot be denied on the basis of undisclosed adverse material, and a demand cannot be sustained against self-assessed imports without first adopting the legally appropriate proceedings to disturb the original assessment; confiscation and redemption fine are also unsustainable where the goods are not available.

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