Certificate of Origin verification procedure governs preferential tariff exemption; customs cannot independently reject origin claims based on value addition.

Preferential tariff exemption for gold jewellery imported from Thailand required a Certificate of Origin issued by the designated Thai authority. Where customs doubted the certificate's authenticity or declared origin, the applicable origin rules required retroactive verification through the issuing authority within the stipulated period. Customs could not independently reject the certificate based on its own assessment of value addition without using that procedure. Consequently, denial of exemption under Notification No. 85/2004-Cus and the related penalty on the partner were unsustainable.

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Issues: Whether exemption under Notification No. 85/2004-Cus dated 31.08.2004 could be denied by disbelieving the Certificate of Origin for gold jewellery imported from Thailand without following the prescribed verification procedure.

Analysis: The preferential tariff treatment required production of a Certificate of Origin issued by Thailand's designated authority. The applicable origin rules permitted the importing customs authority to seek retroactive verification where it entertained doubt about the certificate's authenticity or the stated origin, with a response to be obtained from the issuing authority within the stipulated period. The Revenue did not follow that procedure and instead independently rejected the certificate on its own assessment of value addition.

Conclusion: The exemption could not be denied without following the prescribed verification procedure; denial of the notification benefit and the penalty on the partner were unsustainable.

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