Customs cannot discard a confirmed origin certificate or rely on selective sampling to sustain a time-barred demand.

A valid Certificate of Origin accepted at import and later confirmed by the issuing foreign authority cannot be unilaterally rejected by Customs on domestic verification alone, so preferential SAFTA duty benefit was restored. Selective post-import retesting of only a few samples could not be extended across all consignments to reclassify the goods as low erucic acid rapeseed oil, making the Revenue's sampling method legally unsound. Where bills of entry, test reports, and origin certificates were disclosed at import and no suppression, wilful misstatement, or collusion was shown, the extended limitation period was unavailable and the demand was time-barred; the duty, interest, and penalties were set aside.

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Issues: (i) whether the Customs authorities could reject the SAFTA Certificates of Origin and deny preferential duty benefit on the basis of domestic investigation and subsequent verification, (ii) whether reliance on a few re-tested samples could be applied across all consignments to classify the imported goods as Low Erucic Acid Rapeseed oil, and (iii) whether the demand was barred by limitation and unsupported by suppression or misstatement.

Issue (i): whether the Customs authorities could reject the SAFTA Certificates of Origin and deny preferential duty benefit on the basis of domestic investigation and subsequent verification.

Analysis: The imported goods were cleared on self-assessed Bills of Entry after production of the SAFTA Certificates of Origin and contemporaneous CRCL reports. The Certificates of Origin were sent for verification to the Bangladesh authorities, who confirmed the correctness of the declarations and the supporting records. The adjudicating record did not show any cancellation, recall, or rebuttal by the issuing authority. In the absence of material showing forgery, collusion, or successful disproof of origin, the Indian Customs authorities could not unilaterally discard the certificates merely because erucic acid content was not separately verified by the foreign issuing authority. The later statutory burden under Section 28DA of the Customs Act, 1962 did not apply to imports made before its commencement.

Conclusion: The rejection of the Certificates of Origin and denial of preferential benefit was unsustainable and was held against the Revenue.

Issue (ii): whether reliance on a few re-tested samples could be applied across all consignments to classify the imported goods as Low Erucic Acid Rapeseed oil.

Analysis: The record showed that CRCL reports at the time of import were already available for the consignments, and those reports reflected varying erucic acid values, including several instances above 2%. The Department later selected only a few samples for fresh testing and attempted to extend those results to all consignments. Such selective sampling was not a reliable basis for universal reclassification, particularly when the original import-time test results were not uniformly adverse and no third round of verification was undertaken. The methodology adopted by the Revenue was therefore found to be legally flawed.

Conclusion: The reclassification based on a few post-import samples was rejected and was held against the Revenue.

Issue (iii): whether the demand was barred by limitation and unsupported by suppression or misstatement.

Analysis: The relevant documents, including the Bills of Entry, test reports, and Certificates of Origin, were placed before Customs at import stage, and the goods were cleared after verification. No evidence established any suppression, wilful misstatement, or collusion by the importers. The Department initiated proceedings more than two years later and sought to invoke the extended period without a factual foundation for such invocation. In these circumstances, the extended limitation under Section 28(4) could not be sustained.

Conclusion: The demand was held to be time-barred and the invocation of the extended period was not justified.

Final Conclusion: The impugned orders confirming duty, interest, and penalties were set aside, and the appellants were held entitled to consequential relief in law.

Ratio Decidendi: A valid Certificate of Origin, once accepted at import and not shown to be forged or cancelled by the issuing authority, cannot be unilaterally discarded on domestic surmise; and selective post-import sampling cannot justify a demand for all consignments in the absence of proven suppression or other facts warranting the extended limitation period.

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