TaxTMI 
TaxTMI 
2025 (4) TMI 577
X X X X Extracts X X X X
X X X X Extracts X X X X
....EPA notifications, BCD @5% was demanded by the department vide Show Cause Notice dated 19.06.2019. The SCN was adjudicated vide OIO dated 19.11.2019. In an appeal filed by the party, the Commissioner (Appeals) upheld the OIO vide OIA dated 22.12.2020. Hence, this appeal. 2. Broadly, the appellant has relied on the following grounds : 2.1 The Certificate of Origin (COO) benefit is subjected to rules notified vide Notification 187/2009 which provides for a process of verification in case of any doubt. In addition to this notification, the department has also issued instructions/circulars in this regard. CEPA itself contains provisions to verify COO. Circulars are binding on the department and CEPA provisions need to be honored otherwise it will be a violation of Article 51(C) of the Constitution. Instead of rejecting the COO suo-moto, the revenue should have sent it for verification. The crux of his argument is that without verifying COO by following the procedure prescribed in the Notification, Instruction, and CEPA, the department can not reject the benefit of the COO. This argument has another implicit logic that the CTH declared by the appellant is correct since the same ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Plastics V/s Collector of Customs, New Delhi-1997(95) Ε.L.T. 260 (Tri.-Del) * Collector of Customs & Excise V/s Lekhraj jessumal & Sons-1996-(82) E.L.T. 162 (S.C.) 3. To the contrary, Revenue submissions are as under: 3.1 Classification of the goods and the exemption under CEPA are two separate issues. The CEPA was operationalized vide Notification 152/2009- Custom dated 31.12.2009 which was further amended vide Notification No 66/2016-Customs dated 31.12.2016. As per the amended notification, following entry was exempted: Sr No. Chapter, Heading, Sub-heading or tariff item Description of Goods Rate (in percentage unless otherwise specified) 597 7405 to 7407 All Goods 0.00 Thus, the goods falling under sub-headings 7405 to 7407 were exempted vide the above notification. The appellant has classified their goods under Sub-heading 7407 with the description Copper Rods. 3.2 Sub-heading 7407 & 7408 are reproduced as under: 7407 COPPER BARS, RODS AND PROFILES 740710 - Of refined copper: 74071010 --- Electrolytic copper rods or black copper rods 74071020 ---Other copper rods Further, Sub-heading 74....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m, they are excluded from the definition of "Bars and Rods". On the other hand, Section note 1(f) states that if the goods are in coil form, they come under the definition of "Wire". Wire has to be classified under Sub-heading 7408 as per note 1(d) reproduced above. Entry No 597 in the Notification 66/2016-Customs exempts the goods which fall under CTH 7405 to 7407. Since correct classification of the goods in question is under Sub- heading 7408, the benefit has been denied by the department. There is no doubt about the fact that the goods were in coil form as has been admitted by the appellant, even in their grounds of appeal. When goods are in coil form, they cannot be classified under sub-heading 7407 since Note 1(d) to Chapter 74 excludes goods in coil form from the scope of "Bars and Rods". 4. The contention of the appellant that verification should have been done as prescribed in Notification No 187/2009-Customs is misplaced. Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea) Rules, 2009 have been notified vide this notification. The rules provide mechanism to v....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The grounds provided for verification are: a. In case of a doubt regarding the genuineness of the Certificate of Origin such as any deficiency in the format of the certificate or mismatch of signatures or seal when compared with specimens on record; b. In case of a doubt on the accuracy of information regarding origin, Le. where a doubt arises on whether the product qualifies as an originating good under the relevant Rules of Origin. In other words, these are cases where there is a reasonable belief that a product Therefore, the mechanism provided for verification of any document such as Rules of Origin, Instruction or any Circular issued in this regard is regarding originating criterion only which is not under dispute here. 4.3 In the instant case, the issue is not about the origin of goods and the criterion provided for the same. The issue is mis-declaration of goods and thereby, the CTH. Description of Goods and Sub-heading were misdeclared to claim COO benefit. No mechanism or procedure has been provided in either the statute or any of the Rule/Instruction/Circular to correct the description of goods or the CTH in the COO. 4.4 A case on similar facts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gin; (iii) any alteration in the certificate of origin is not authenticated by the Issuing Authority; (iv) the certificate of origin is produced after the period of its expiry, and in all such cases, the certificate of origin shall be marked as "INAPPLICABLE". From the sequential application of this section, it appears that this section is applicable for live consignments, the intent of the legislature becomes pretty clear on a bare perusal of this section. It has been clearly mentioned in this section that the tariff item which is not eligible for preferential tariff agreement, the Certificate of Origin shall be marked as "INAPPLICABLE" and the preferential tariff treatment may be refused without verification. Here the whole basis for exemption was tariff Sub-heading which is a substantive requirement. The most significant eligibility criteria was the Tariff Sub- heading which has to be satisfied to claim the benefit of the notification. 4.6 Country of Origin certificate is no authority decides Sub-heading of the goods. When Chapter Note has clearly excluded goods in coil form from the scope of Bars and Rods, Chapter Note is the only tool to decide Sub-head....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aken under substantive law, for, the procedural aspects stand subordinate to substantive provisions. 5.2 SURYA LIGHT Vs Commissioner of Customs Banglore-2008 (226) E.L.T. 74 (Tri. Bang.): 7. On a very careful consideration of the issue, we find that the appellant imported Energy Saving Lamps and claimed the benefit of the Notification in terms of the Indo-Sri Lankan Free Trade Agreement. The Adjudicating Authority has elaborately dealt with the issue in its findings. It is seen that originally when the Bill of Entry was filed, it was covered by Invoice No. 12336 dated 20-10-2003 of M/s. Red Sea Trading Co. Ltd., Hong Kong, which indicated China as the Country of Origin. It is seen that later, this invoice had been replaced by another fabricated invoice of M/s. Ceyenergy Electronic Co. Pvt. Ltd., Sri Lanka. Even though the investigations have revealed that the Sri Lankan authorities indeed had given the Certificate of Origin, the learned Commissioner had given elaborate reasons for not giving the benefit of Indo-Sri Lankan Free Trade Agreement benefit...... 7.3 The investigations have clearly revealed that the goods are of Chinese origin. Further, the Commission....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rculars are binding on the department and so, the Circular issued regarding verification of COO should be followed before rejecting the same: * Noble Imports Pvt Ltd Vs Uol-2017(349) ELT 4(AP); * Sunil Polyplast Ltd Vs CC, Kolkata -2002 146 (ELT) 435 (Tri-Kol); * Ranjita Agencies Vs CC (Port), Calcutta- 2001 133 ELT 388(Tri-Kol); * Vima Industrial Plastics Vs CC- 1997 95 ELT 260 (Tri-Del) These case laws are not relevant since any Instruction/Circular issued by the department on the COO is for verification when the doubt is with regard to originating criterion. Here, the issue is of mis-declaration/mis-classification of imported goods, and not the originating criterion of such goods. Similarly, in other case law mentioned in para 12.9 of the Grounds of Appeal e.g. Nakoda Import Pvt Ltd Vs Uol-2017(349) ELT4, et al, facts were different from the instant case and hence, these are not applicable. 7. The contention of the appellant that the goods were in coil form for ease of transportation and it is a mode of packaging only; and that the classification should be done under Bars and Rods since the goods are going to be sold/used as Rod and not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lls of Entry. During final hearing of the matter last time, all such information and documents were placed on record. 9.3 The above information/documents clearly indicate two things-First, clearance of the goods in all the Bills of Entry was granted on the basis of self assessment and secondly, goods were not examined in the case of any of the Bills of Entry. This clearly proves that at no point of time, the department was made aware of true nature of the goods. There was no way the department could find out mis-declaration and mis-classification from the documents submitted at the time of import. In this era of self assessment, the most vital piece of information was mis represented before the department. Thus this is a clear cut case of suppression of facts. The very basis of exemption was the shape of the goods which was mis-declared and thus, mis-classified also. 9.4 As regards intention, it has been argued by the learned advocate for the appellant that they declared coil in the packing list and the COO and so, no intention/motive can be alluded to the appellant. Just a bare perusal of these documents proves the intention of the appellant. The intention of hiding actual a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'misstatement or suppression of facts' clearly spells out that there has to be an intention on part of the assessee to evade the duty. 16.6 The newly substituted Section 28 of the Customs Act by Act 8 of 11, when closely read brings out different situation. In Sub section (1) of Section 28 it is provided that recovery of duty would be in respect of duties not levied or not paid etc. for any reason other than the reasons of collusion or any willful misstatement of suppression of facts. Therefore the action of recovery under Section 28 will be in respect of duties not levied or not paid or short levied or short paid or erroneously refunded. The consideration of (a) collusion or (b) any willful misstatement or (c) suppression of facts, are mentioned in Sub section (4) to be the grounds where the notice for recovery is issued invoking the extended period of limitation. What is noticeable is that collusion can be the ground to resort to Sub section (4). Furthermore, and importantly the word 'willful' does not precede the reason of suppression of facts' mentioned in Sub clause (c). In order to invoke Sub section (4) on the ground of suppression of facts, elem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssed the fact and claimed the benefit of preferential duty treatment under the Exemption Notification. It could be said that while presenting the documents including the RVC content in the Origin Certificate, there was suppression of facts. Hon'ble Court further held: 17. The extended period of five years under subsection (4) of Section 28 could indeed be invoked by the authorities since the petitioners were found guilty of suppression of facts regarding RVC content in the Origin Certificate. The suppression is not always concealment of facts. The suppression can take form of suggesting wrong facts and to obtain some advantage, which may not be available upon the disclosure of correct and genuine facts. Suppression may manifest itself in misrepresentation also. In the present case, the misrepresentation became suppression, as the exemption benefit or preferential duty benefit was obtained by putting forth wrong facts, which did not constitute eligibility to earn the exemption from the Basic Customs Duty. By suggesting wrong details and by subscribing untruth, essential conditions regarding RVC was not fulfilled. It partook suppression in eye of law and within ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng list in coils. The statutory provisions being clear, no doubt, even from the literal interpretation, in the minds of anyone could be left that the same were not to be treated 'as bars and rods'. We, therefore, find that the certificate of origin as submitted was incorrect as the HSN is allied in most countries and could not have been different in South Korea. Therefore, with such apparent mistake, benefit has been correctly denied by the department. This is supplemented by the assertion of the party too, when they state that CL in COO refers to coil. We uphold finding in this regard and direct that Tariff Heading 74081190 is appropriate heading as indicated by the department. Therefore, exemption under CEPA notification was correctly denied and BCD @ 5% was correctly demanded, in Show Cause Notice dated 19.06.2019. 14.2. This brings us to the second issue about limitation, we find that the Bills of Entry in the instant case were filed from June 2017 to August 2017 and Show Cause Notice was issued on 19.06.2019. In the instant case, we find that in the relevant Bills of Entry in column of description of the goods, it was not declared that the goods were in coil form which was ....