TaxTMI 
TaxTMI 
2015 (12) TMI 476
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....ng with full purpose of verification of documents. Hence you are advised to produce bond along with full financial guarantee to cover the differential duty. 3. For the sake of convenience, the facts in W.P.No.21399 of 2015 are discussed hereunder. 4. The averments in W.P.No.21399 of 2015 are that the writ petitioner, which is a private limited company and is engaged in trading of gold jewellery, has been importing the gold jewellery from Indonesia. The gold jewellery has HS classification 7113191000 and the same would attract customs duty at 15% advalorem. However, by virtue of notification No.46 of 2011 dated 01.06.2011 the same is exempted from the payment of customs duty on account of the fact that there is an agreement with the Government of Indonesia commonly known as ASEAN-India Free Trade Area (AIFTA). This agreement is on account of notification No.189/2009-CUSTOMS (N.T.) dated 31.12.2009 issued under Section 5 (1) of the Customs Tariff Act, 1975 (for short, the Act). The petitioner has imported certain gold jewellery and filed its bill of entry on 23.06.2015 along with the certificate of origin issued by the designated authority at Surabaya of Indonesia. The 3rd responde....
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....ecessary steps are already been taken for verification of the same. In paras 10 to 12 of the counter affidavit, which are relevant, are extracted hereunder:- 10. In the petitioners case, the exporter is a private company PT. Untung Bersama Sejahtera and can only source God from other refiners or by import for the manufacture of jewellery. The exporter cannot be in position to either state that the gold is wholly produced in Indonesia or verify its originating content. 11. It may be mentioned that over the last few months gold jewellery of over 11 tons involving a suspected duty evasion of approximately Rs. 1500 crore have been imported by a handful of importers in suspected close collusion with a handful of exporters in Indonesia and Malasia. There is reasonable belief that the imports suspectedly involve a systemic abuse of the provisions of free trade between India & ASEAN countries and origin criterion laid therein. 12. In view of the above, for reasons of equity of uniformity of treatment, instructions have been issued so as to obtain such security from all importers seeking to claim benefit of the duty concessions envisaged under notification 46/20110Cus dated 1.6.2011....
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....uch surety or security or both as the assessing officer deems fit in addition to the 20% of duty deposit stipulated under Regulation 2 of the Regulations. The Provisional Duty Regulations also empowered the Authorities to demand Bank Guarantee for 100% differential duty. All the steps are in fact only on account of there being a prima facie doubt about the origin of the goods. The administrative measure of calling for Bank Guarantee for full differential duty has been taken up at all India level, so as to avoid discriminative treatment from officer to officer. 12. The communication letter addressed by the 3rd respondent to the Commissioner of Customs, Hyderabad dated 04.08.2015, in turn, the Commissioner of Customs addressed a letter dated 12.08.2015 to the Director (International Customs Division), Central Board of Excise and Customs, New Delhi, and they were placed on record. 13. With the above contentions, the respondents prayed for dismissal of the writ petition. 14. We have heard learned senior counsel for the petitioners and Additional Solicitor General appearing on behalf of the respondents. 15. The principle contention of the petitioners is that demanding for financial ....
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....No.46/2011. The goods from ASEAN countries attract nil rate of duty. There is an agreement known as Agreement on Trade in Goods under the Framework Agreement on the Comprehensive Economic Co-operation between the Republic of India and the Association of Southeast Asian Nations (ASEAN). The terms of agreement is defined in Rule 2(a) of the Rules. Analysis of the said agreement so far as relevant for our purposes would reveal; terms in agreement are defined in Rule 2(a) of the Rules, Rule 3 speaks out the origin criteria, Rule 3(a) deals with products which are wholly obtained or produced in the exporting party as specified in rule 4, or (b) products not wholly produced or obtained in the exporting party provided that the said products are eligible under rule 5 or 6. 18. Rule 4 elaborates wholly produced or obtained products. Rule 4(e) read with (j) are relevant for the present cases. Rules 7 to 11 are not required to be referred to for the purpose of this case. Rule 12 deals with methodology of determination of origin of a product, when it is manufactured utilizing both originating and non-originating materials, mixed or physically combined, the origin of such materials can be dete....
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.... followed in case AIFTA Certificate of Origin issued by the exporting country is not accepted. The Issuing Authority also should be notified of the grounds for the denial of preferential tariff treatment. Rule 7(d) requires, the issuing Authority shall provide with a detailed exhaustive clarification addressing the grounds for the denial of preferential tariff treatment raised by the importing party. The Customs Authority of the importing party shall accept the AIFTA Certificate of Origin and grant the preferential tariff treatment if the clarification is found satisfactory. Rules 13 to 15 deal with submission of original AIFTA Certificate of Origin to the Customs Authorities at the time of lodging the import entry. Rules 15 makes it clear that if there are minor discrepancies, the same are required to be ignored. Rule 16 deal with verification and the process that is required to be followed for further verification. Great emphasis has been placed by the learned Additional Solicitor General on Rule 16(a)(iii). 22. Rule 16 provides verification, which reads as under. Rule 16(a): The importing party may request a retroactive check at random and/or when it has reasonable doubts as ....
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.... 16(a)(ii) is itself three months after receipt of the request for retroactive check, which contemplates two kinds of check one is a longtime check, which is not relating to any party and the other relating to a specified party. Further Rule 16(a)(iii) deals with where reasonable doubts have arisen with respect to authenticity or accuracy of a document, which is required to be verified. In which event, there is a provision for suspension of preferential tariff treatment while awaiting result of the verification. In contrast Rule 16 (a)(iv) would come into play in cases where the origin of goods is in doubt. So far as the cases where the origin of goods is in doubt, which is relatable to Rule 3 to 6 of the Rules. The outer limit of six months is provided to the exporting party and not to the Customs Authorities in considering the validity or otherwise of the certificate. Further, Rule 16(a)(i) makes it clear that the entire process of retroactive enquiry would commence only after the Customs authorities of Importing party notifying about the non- acceptance or rejection of the Certificate or Origin in terms of the procedure. In other words the question of conducting retroactive enqu....
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....ctive countries solemn promises is of utmost importance to the bilateral trade between the two Nations. 29. We are also not impressed with the arguments of the learned Additional Solicitor General that the writ petition is not maintainable as there is no order passed by the Authorities and it is only a take it or leave offer communication made to the petitioner. If the argument of the learned Additional Solicitor General has to be accepted the natural consequence of sending of such communication is totally outside the purview of the Act and Rules, in which event the Authorities themselves are acting outside the framework of the Rules. If what has been done by the Authorities in issuing the communication is out the statutory framework, the petitioner is entitled to approach this Court as the same is not contemplated under the Rules and such communication is liable to be quashed under Article 226 of the Constitution of India. Imposing of a arbitrary and onerous condition, which is otherwise not contemplated under the provisions of the Act and Rules can certainly be challenged under Article 226 of the Constitution of India. 30. The further aspect that is required to be considered by....