Preferential customs exemption upheld for Thai-origin goods where valid origin certificate existed and verification procedure was not followed.

A preferential customs exemption for Thai-origin silver jewellery was held available where a valid Certificate of Origin issued by the Thai authority was on record with the import documents. The customs authority could not deny the benefit merely because the importer gave incomplete questionnaire replies, especially on raw-material sourcing and refinery details outside its direct knowledge. Under the applicable origin-verification rules, any doubt had to be addressed through the prescribed verification process with the issuing authority, and there was no evidence that the certificate was forged or unauthentic. The duty demand and the order sustaining it were set aside.

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Issues: Whether the importer was entitled to nil basic customs duty on silver jewellery imported from Thailand under the exemption notification, and whether denial of the benefit on the ground of incomplete answers to the verification questionnaire and invocation of the origin-verification provisions was valid.

Analysis: The imported goods were covered by the exemption entry for goods of Thai origin, and the Certificate of Origin issued by the competent authority of Thailand was on record along with the import documents. Under the applicable rules governing preferential tariff treatment, a valid Certificate of Origin is the foundational document, and where the customs authority has doubt about its acceptability, the prescribed course is verification with the issuing authority and communication of the grounds for denial. The record did not show any verification from the issuing authority or any evidence that the certificate was forged or otherwise unauthentic. The questionnaire responses, including replies such as "not known to us", could not be treated as complete non-response, particularly when the questions sought information about the raw material supply chain and refinery details which were not reasonably within the importer's knowledge. Denial of the exemption solely on that basis amounted to a procedural approach beyond the notification and the governing origin rules.

Conclusion: The importer was entitled to the nil rate of basic customs duty, and invocation of the origin-verification provisions to deny the exemption was not justified.

Final Conclusion: The duty demand and the appellate order sustaining it were set aside, and the appeals were allowed.

Ratio Decidendi: A preferential duty exemption supported by a valid certificate of origin cannot be denied merely for incomplete questionnaire responses unless the customs authority follows the prescribed verification procedure and establishes a real basis to disbelieve the certificate.

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