2025 (12) TMI 1682 - AT - Customs

Provisional customs assessment and India-UAE CEPA NIL duty claim at finalization u/s18; retrospective origin certificate accepted on remand

Where customs assessments were made provisional, finalization was governed by s.18 of the Customs Act, 1962, and not s.17; applying SC and CEGAT (LB) ... Fnalization of assessment in respect of the Bills of Entry u/s 18 (2) of the Customs Act, 1962 - denial of exemption benefit of NIL duty under N/N. 39/2022-Customs (NT) dated 30thApril, 2022 issued under CEPA between India and UAE - Non-availability of original documents, test report and final quantity in both the Bills of Entry - rejection of appeal of the appellant on the ground that Certificate of Country of Origin was issued retrospectively and benefit of exemption was not claimed at the time of filing Bills of Entry and Out of Charge order - HELD THAT:- In the present case, the assessments were provisional and, therefore, these are covered under Section 18 of the Customs Act, 1962 and not by the provisions under Section 17 of the Customs Act. We agree with the law laid down in Mangalore Chemicals and Fertilizers Ltd [1991 (8) TMI 83 - SUPREME COURT] and in PMT Machines Tools [1991 (3) TMI 163 - CEGAT, NEW DELHI-LB] that in cases where assessment was made provisional for any purpose, it shall be considered as provisional for all purposes. Therefore, finding given by the learned Commissioner that the case laws relied upon by the appellant are not applicable in the present case is not correct. The Assessing Officer should have considered the claim of the appellant for granting benefit of preferential rate of duty under India-UAE CEPA at the time of finalization of provisional assessment if it otherwise satisfied the conditions of the notification. It is pertinent to note here that at the time of finalizing the provisional assessment of Bill of Entry No. 8597441 dated 9th May, 2022 and Bill of Entry No. 8947513 dated 3rd June, 2022, the above mentioned Instruction No. 21/2024-Customs issued by CBIC was not available - the said Instruction is required to be considered by the Adjudicating Authority while finalizing the provisional assessment in this case. The matter is liable to be remanded to the Adjudicating Authority with the direction to consider the issue of giving benefit of exemption to the appellant from payment of Customs duty on the basis of Certificate of Country of Origin retrospectively, which was not claimed at the time of filing Bills of Entry or Out of Charge order in the light of CBIC Instruction No. 21/2024-Customs dated 26.10.2024 and in the light of observations made in this order. Appeal allowed by way of remand. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether, in the case of provisional assessment, the importer's claim for preferential/NIL duty under the India-UAE CEPA can be considered at the stage of finalisation even though no preferential claim was made in the Bills of Entry or at the time of Out-of-Charge. (ii) Whether denial of the CEPA preferential benefit solely on the ground that the Certificate of Origin was issued retrospectively and not produced/claimed at import stage is sustainable, and whether the competent authority must consider the later-issued Certificate of Origin and the subsequently issued CBIC instruction while finalising the provisional assessment. 2. ISSUE-WISE DETAILED ANALYSIS (A) Considerability of preferential claim at finalisation stage when assessment was provisional Legal framework (as discussed by the Court): The Court treated the case as governed by Section 18 of the Customs Act, 1962 because the Bills of Entry were provisionally assessed, and also examined Rule 3(1) of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, which requires a preferential tariff claim to be made at the time of filing the Bill of Entry. Interpretation and reasoning: The Court held that where assessment is made provisional, it remains provisional for all purposes. On that basis, the Court rejected the approach of denying consideration of the CEPA claim merely because it was not declared at the time of filing the Bills of Entry or at the time of Out-of-Charge. The Court reasoned that the proper course is for the assessing authority to consider the importer's claim at the time of finalisation of the provisional assessment, provided the conditions of the relevant notification/rules are otherwise satisfied. Conclusion: The Court concluded that the claim for preferential/NIL duty under CEPA ought to be examined during finalisation of the provisional assessment, notwithstanding the absence of a preferential claim at the initial filing/Out-of-Charge stage. (B) Effect of retrospective Certificate of Origin and applicability of later CBIC Instruction while finalising provisional assessment Legal framework (as applied by the Court): The Court relied on the substance of CBIC Instruction No. 21/2024-Customs (as reproduced and applied in the Court's reasoning), which clarifies that retrospective issuance of a Certificate of Origin is permissible under the India-UAE CEPA rules, and that where preferential treatment was not claimed or extended at import, the importer does not lose the right to claim benefit upon subsequent submission of a valid Certificate of Origin within the prescribed time, so long as authenticity and origin are not disputed. The Instruction also indicates that the requirement of uploading the Certificate of Origin at the time of filing may not apply where the Certificate is issued after importation. Interpretation and reasoning: The Court noted that the lower appellate authority denied the benefit because the Certificate of Origin was retrospective and the claim was not made at import stage. The Court found that, since the CBIC Instruction was not available when the provisional assessments were finalised/decided, the adjudicating authority should now consider it while finalising the provisional assessments. The Court therefore directed reconsideration of eligibility to preferential/NIL duty on the basis of the retrospectively issued Certificate of Origin, in the light of the Instruction and the Court's finding that provisional assessment allows consideration at finalisation stage. Conclusion: Denial solely on the grounds of retrospective issuance and non-claim at filing/Out-of-Charge was not sustained; the matter required remand for fresh decision by the adjudicating authority to consider the preferential benefit claim in light of the CBIC Instruction and the Court's observations. Final disposition material to the decision: The impugned order was set aside and the matter was remanded to the adjudicating authority to re-examine grant of CEPA preferential/NIL duty benefit during finalisation of the provisional assessment, considering the retrospectively issued Certificate of Origin and the CBIC Instruction.