TaxTMI 
TaxTMI 
2025 (11) TMI 1363
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....e appellants herein have imported "Latex Rubber Surgical Gloves" from Sri Lanka and for this purpose they have filed Bills of Entry (B/E) No. 5341843 dated 02.04.2023 declaring the assessable value of the imported goods at Rs.1,25,39,101/- and determined the duty of customs payable as Rs.15,04,692/- by classifying the same under Customs Tariff Item 4015 1200 of the First Schedule to the Customs Tariff Act, 1975 and claiming concessional duty under List-5 of the Notification No.26/2000-Customs dated 01.03.2000 read with Notification No.19/2000-Customs (N.T.) dated 01.03.2000. The appellants have also submitted Country of Origin (COO) Certificate No. CO/ISFTA/2023/02536 dated 29.03.2023 along with other import documents in support of their claim for concessional duty. In respect of such imports, the commercial invoice has been issued by M/s Ansell Global Center (Malaysia) SDN BHD, Malaysia, which is called 'Third country invoicing' / 'third party invoicing'. Similarly, the appellants have also imported impugned goods in further consignments by filing B/E Nos. 5329524 dated 01.04.2023; 6389305 dated 13.06.2023; 7393863 dated 17.08.2023 and 7673599 dated 04.09.2023 in claiming the abov....
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.... (Appeals), who vide Order-in-Appeal dated 24.06.2024, had rejected all the appeals filed by the appellants by upholding the original orders. Feeling aggrieved with the common impugned order dated 24.06.2024, the appellants have filed these appeals before the Tribunal. 3.1 Learned Advocate appearing for the appellants submitted at the outset that the 'third party invoicing' is only a trading arrangement between business entities and it has nothing to do with the origin of the goods, which is from Sri Lanka. This is not being disputed by the department. The only objection raised by the department is that the Country of Origin (COO) Certificate, does not have separate indication of the details of third party invoicing and therefore the notification benefit cannot be extended. In this regard, learned Advocate submitted that COO Certificate has been prescribed by a notification and neither the supplier nor the importer can add the information relating to third party/country invoicing details in such certificate. 3.2 Learned Advocate further submitted that the CBIC had issued instructions vide No.23/2024 dated 21.10.2024, wherein it has been clarified that COO certificate is only ....
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....hereby exempts goods of the description specified in column (3) of the Table hereto annexed and falling under the Chapter, heading No. or sub-heading No. of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), specified in the corresponding entry in column (2) of the said Table, from so much of that portion of the applied rate of duty of customs as is specified in the corresponding entry in column (4) of the said Table, subject to the following conditions, namely.- (1) the importer proves to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be in accordance with the Customs Tariff (Department of Origin under the Free Trade Agreement between the Democratic Socialist Republic of Sri Lanka and the Republic of India) Rules, 2000 published with the notification of the Government of the India in the Ministry of Finance (Department of Revenue) No. 19/2000-Customs (N.T), dated the 1 St March, 2000 that the goods in respect of which the benefit of this exemption is claimed are of the origin of Sri Lanka; (2) in respect of articles of apparel and clothing accessories specified in List 3 of the Table ....
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.... Description of goods Portion of the applied duty (1) (2) (3) (4) LIST-1 xxx 2.03, 2.04, 02.05,0206.30, 0206.41, 0206.49, 0206.80, 0206.90, 02.07,0208.10, 0210.11, 0210.12, 0210.19, 06.03, 06.04, 07.02,0703.90, 07.04, 07.05,07.06, 07.07, 07.08, 07.09, 07.10, 07.11, 07.12, 07.14, 14.01, 14.02, 14.03, 1404.10, 1404.20, xxx xxx xxx LIST-4 0902.10, 0902.20, 0902.30, 0902.40, and 2101.20 All goods 50% LIST-5 1. All goods other than 50% a) goods mentioned in lists 1, 2 3 and 4 b) goods listed in the Annexure appended to this notification Customs Tariff (Determination of origin of goods under the Free Trade Agreement between the Democratic Socialistic Republic of Sri Lanka and the Republic of India) Rules, 2000 In exercise of the powers conferred by sub-section (1) of section 5 of the Customs Tariff Act, 1975 (51 of 1975), the Central Government hereby makes the following rules, namely :- 1. Short title and commenc....
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....namely :- (a) raw or mineral products, including mineral fuels, lubricants and related materials as well as mineral or metal ores, extracted from its soil, its water or its sea bed; (b) vegetable products, including agricultural and forestry products, harvested there; (c) animals born and raised there; (d) products obtained from animals referred to in clause (c); (e) products obtained by hunting or fishing conducted there; (f) products of sea fishing and other marine products from the high seas by its vessels; (g) products processed and/or made on board its factory ships exclusively from products referred to in clause (f); (h) used articles collected there, fit only for the recovery of raw materials; (i) waste and scrap resulting from manufacturing operations conducted there; (j) products extracted from the seabed or below seabed which is situated outside its territorial waters, provided that it has exclusive exploitation rights; (k) goods produced there exclusively from the products referred to in clauses (a) to (j). Explanation . - For the purposes of this notification: - (....
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....e directly consigned from the exporting country to the importing country, namely :- (a) if the products are transported without passing through the territory of any country other than the countries of the Contracting Parties. (b) the products whose transport involves transit through one or more intermediate countries with or without transhipment or temporary storage in such countries : Provided that - (i) the transit entry is justified for geographical reason or by considerations related exclusively to transport requirements; (ii) the products have not entered into trade or consumption there; and (iii) the products have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition xxx xxx xxx xxx 11. Certificates of origin. - Products eligible for a Certificate of origin in the form annexed shall support Preferential treatment issued by an authority designated by the Government of the exporting country and notified to the other country in accordance with the certification procedures to be devised and approved by both the Contracting Parties. ....
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....and that they comply with the origin requirements specified for those goods in ISFTA for goods exported to.................................................... (Importing Country) ........................................................... Place and date, signature of the authorized signatory 12. Certificate It is hereby certified, on the basis of control carried out that the declaration by the exporter is correct: ................................................... Place and date, signature and stamp of certifying authority. I. General Conditions To qualify for preference, products must : (a) fall within a description of products eligible for concessions in the country of destination under this agreement; (b) comply with ISFTA Rules of Origin. Each Article in a consignment must qualify separately in its own right; and (c) comply with the consignment conditions specified by the ISFTA Rules of Origin. In general, products must be consigned directly within the meaning of Rule 9 hereof from the country of exportation to the country of destination. II. Entries to be made in Box 8 Preference products must be....
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....dispute lies in the narrow compass of examining whether the procedure prescribed under No.19/2000-Customs (N.T.) dated 01.03.2000 have been fulfilled with respect to 'Country of Origin' certificate. 8.3 In respect of the above issue of dispute, learned Commissioner of Customs (Appeals) has held that the notification prescribing the format of Country of Origin Certificate does not allow third-party invoicing anywhere in such COO certificate, and therefore concluded that the intent of notification is to disallow the benefit in case of consignments from third party. The relevant paragraphs in the said impugned order are extracted and given below: "7.8 I observe that Circular No.53/2020-Customs, dated 08.12.2020, has been issued by the CBIC, on the subject of Third-Party Invoicing in the case of Preferential Certificates of Origin issued in terms of DFTP for "wholly obtained goods" and is use of Third-Party Invoicing while claiming preferential tariff treatment in terms of DUTY-FREE TARIFF PREFERENCE (DFTP) SCHEME for LEAST DEVELOPED COUNTRIES, in respect of "wholly obtained goods". The notification says that Parent Notification, the Notification No. 29/2015-Cus. (N.T.) dat....
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.... the impugned goods are 'wholly obtained', as Rule 7(b) of the Rules of 2000 state that in respect of Non-originating materials, it shall be considered to be sufficiently worked or processed to extend the ISFTA benefit, when there is change in the classification of the final product obtained, at the four digit level, of the Harmonised Commodity Description and Coding System, which is different from those in which all the non-originating materials used in its manufacture are classified. As the COO Certificates specifically provide that "The Tariff Heading of the imported Raw materials has been changed at four digit level at the final Manufacturing process taken place within the Sri Lanka", there is sufficient evidence to state that the impugned goods are of 'wholly obtained' from Sri Lanka. Furthermore, the COO certificates have been issued by the Commercial Research Officer, Department of Commerce, Colombo, Sri Lanka who are the proper authority for issuing such COO certificates, and there is no dispute on this point. In the above factual position, the conclusion arrived at by the learned Commissioner of Customs (Appeals) for denying the ISFTA duty concession in the present case is....
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....ell as furnish any other information it may consider relevant and also set out deadlines for requesting verification and deadlines for replying to a request for verification. A request for control/ verification by itself shall not prevent the release of the goods, provided that they are not subject to import prohibitions or restrictions and there is no suspicion of fraud. These principles have also been incorporated in Rule 6 'Verification request' of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. None of such request(s) have been initiated in the present case, to claim that it is a genuine case of verification of COO by the department. Therefore, the orders passed by the authorities below in denying the ISFTA duty concession is without any authority of law. 10. CBIC had issued a Circular No. 53/2020-Customs dated 08.12.2020, explaining that in the absence of a specific provision for third country invoicing/ third party invoicing or where the notification is silent on this aspect, by quoting the example of Notification No.29/2015-Cus.(N.T.) dated 10.03.2015, have clarified that where the value of goods does not have impact on the originating ....
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....he base for arriving at the local value content. 4. With regard to notification no 29/2015-cus (N.T), read with notification no. 96/2008-Cus, dated 13.08.2008, which offers unilateral tariff concessions to LDC, the Board is of the view that where value of goods does not have impact on the originating status, i.e the originating criteria is 'wholly obtained', the Certificate of Origin issued in terms of Duty Free Tariff Preference Scheme for Least Developed Countries with third party commercial invoice may be accepted. This is subject to ensuring that the goods referred to in the Certificate of Origin, and the invoice correspond to each other and that the goods satisfy the applicable rules of origin. The normal due diligence to check for authenticity of COO and correctness of claim should continue to be observed. Needless to state the existing stipulation of RBI in regard to third party invoicing, would apply. 5. It is requested that necessary public notice may be issued in this regard. From the above, it also transpires that CBIC circular issued is in support of extending the FTA duty concession, when such procedural rules are silent about the third countr....
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....ld comply with the related extant instructions relating to imports including those on advance payment being made for import of goods." From the above, it also transpires that RBI circular permits, third party payments in respect of import transactions in general and none of the above compliances have been alleged to have been violated in the present case before us. 12. We find that in an identical facts of case, denying the ISFTA benefit on account of the fact the Rules of 2000 are silent on the issuance of a COO retrospectively/retroactively in cases where the COO was not issued at the time of exportation or proximate thereto, but on a later date, the Hon'ble High Court of Madras in the case of Aabis International Vs. Commissioner of Customs, Chennai Customs-II Commissionerate - 2021 (377) E.L.T. 479 (Mad.) have held that the ISFTA benefit is extendable to the appellants, by quashing the order issued by the Customs in denying the FTA benefit. The relevant paragraphs of the judgement dated 17.06.2021 is given below: "7. The Indian Sri Lankan Free Trade Agreement (ISFTA), which governs the import of the consignment in question is silent on this aspect and for this rea....
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....e importer, release the goods subject to furnishing by the importer of security, of an amount equal to the difference between the duty provisionally assessed under Section 18 and the preferential duty claimed. The proviso states that the Principal Commissioner of Customs or the Commissioner of Customs may, instead of security, require the importer to deposit the differential duty amount in the ledger maintained under Section 51A. 16. This puts paid to the argument of Mr. Gunalan that a reference will be made under CAROTAR to the Verification Authority only if the petitioner remits 100% of the duty quantified. This submission is liable to be rejected straightaway in light of Section 28DA(5) which requires the importer to furnish security for 100% differential duty only as a precondition to release of the goods. 17. The scheme of Section 28DA does not permit raising of a demand for security for initiation of verification but only for release of the consignment. Circular No. 42 of 2020 to the extent to which it is transgresses the statutory scheme under Section 28DA, particularly sub-sections (4) and (5) thereof, is an excess of authority and is bad in law. ....