TaxTMI 
TaxTMI 
2026 (4) TMI 1454
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.... the other connected petitions. For convenience, we refer to the proceedings of Writ Petition No. 11540 of 2024. 2. The Writ Petition in question is filed praying for the following substantive reliefs : "(a) that this Hon'ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction, calling for the records of the Petitioner's case and after going into the legality and propriety thereof, to quash and set aside the impugned order dated 12.06.2024 (Exhibit Q) passed by Respondent no. 1 and to allow the claim of preferential rate of duty as claimed in the Bill of Entries (Exhibit K to O). (b) This Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction, directing the Respondents, its servants, subordinates, agents and successors in office : i. to forthwith withdraw and/or cancel the impugned order dated 12.06.2024 (Exhibit Q) passed by Respondent no. 1 and to allow the claim of preferential rate of duty as claimed in the Bill of Entries (E....
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....mports certain goods from the associated enterprises viz. Makrofol (speciality film roll), Bayfol (speciality film roll), Makrolon (polycarbonate resin), Bayblend (Polycarbonate resin) etc. Some of such goods are used as raw material for manufacturing and they originate in Thailand. It is the specific contention of the Petitioner that the Petitioner has been importing such goods for more than ten years. 5. The Petitioner has contended that India has entered into Free Trade Agreements with various South Asian countries, which inter alia provide for preferential rate of duties on import of certain goods, which the Petitioner has been claiming over a period of time. In such context, the Central Government notified various products vide Notification No. 85/2004 on 31st August 2004 under the India-Thailand Free Trade Agreement, under which the Government has exempted duty of customs leviable thereon specified in the first schedule of the Customs Act, 1962 ('the Act') and in excess of the amount calculated at 50% of the rate specified in the corresponding entry in column (4) of the Table in the said Notification. The condition prescribed for claiming such preferential rate of duty is ....
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....11 (Customs), dated 1st June 2011, which superseded Notification No. 153/2009 (supra). The Notification No. 46/2011 provided for preferential rate of duty in respect of goods specified therein from, inter alia, Thailand. In short, the case of the Petitioner is that under all such Notifications, the Petitioner had availed the duty benefit by claiming preferential rate of duty. 8. The Petitioner contends that Section 28DA was inserted by the Finance Act, 2020 to determine the place of origin, under which an importer making a claim of preferential rate of duty in terms of any trade agreement, shall make a declaration that goods qualify as originating goods for preferential rate of duty under such agreement. The importer was also required to provide sufficient documents to show the country of origin, regional value of the imported goods and to show that the products are specified in the rules of origin in the trade agreement. Section 28DA is required to be noted, which reads thus : "S.28DA - Procedure regarding claim of preferential rate of duty - (1) An importer making claim for preferential rate of duty, in terms of any trade agreement, shall,-- (i) make....
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....ns for suspension of preferential tariff treatment, and seek specific information as may be necessary to determine the origin of goods within such time and in such manner as may be provided by rules. (7) Where, subsequently, the Issuing Authority or exporter or producer, as the case may be, furnishes the specific information within the specified time, the proper officer may, on being satisfied with the information furnished, restore the preferential tariff treatment. (8) Where the Issuing Authority or exporter or producer, as the case may be, does not furnish information within the specified time or the information furnished by him is not found satisfactory, the proper officer shall disallow the preferential tariff treatment for reasons to be recorded in writing: Provided that in case of receipt of incomplete or non-specific information, the proper officer may send another request to the Issuing Authority stating specifically the shortcoming in the information furnished by such authority, in such circumstances and in such manner as may be provided by rules. (9) Unless otherwise specified in the trade agreement, any request for verification shall ....
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.... a trade agreement. The Petitioner has also referred to Circular No.38/2020, dated 21st August 2020, which was issued by the Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, issuing clarification in terms of Section 28DA of the Act. The Circular aimed at supplementing the operational certification procedures related to implementation of Rules of Origin as prescribed under the respective trade agreements. It also stipulated that in case there is any doubt with regard to the origin of goods, information should first be called from the importer of the goods, in terms of Rule 5 read with Rule 4 of CAROTAR, 2020 before initiating verification with the partner country in terms of Rule 6. 10. It is on the aforesaid backdrop the Petitioner has contended that on 20th March 2024, the Respondent no. 2 Commissioner of Customs, (NS-III), Turant Suvidha Kendra, Nhava Sheva, issued a public notice No. 33/2024 stating that there are practical problems faced in case of third party invoicing, including cases where FOB value is not indicated in the CoO certificate, third party invoices do not mention FOB value etc and thereby prescribing additional requirements. As the Peti....
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.... measure to ease the verification and defacing procedure of such FTA certificate by TSK official, following procedures are being prescribed: (i) The 3rd Party invoice which does not indicate FOB value as mentioned in FTA certificate along with other cost and services: The importer will submit invoice of exporter of originating country on the basis of which FTA certificate was issued. (ii) The 3rd Party invoice contains a greater number of items than mentioned in FTA certificate. The importer will submit invoice of exporter of originating country on the basis of which FTA certificate was issued and amend the Bill of Entry accordingly. (iii) The CTH in the Bill of Entry filed on the basis of 3rd Party invoice does not match with the CTH indicated in the FTA Certificate: The importer will submit invoice of exporter of originating country on the basis of which FTA certificate was issued and amend Bill of Entry accordingly. 4. In case, the presented FTA certificate does not provide even FOB value in the requisite column, except the FTA certificate which do not have FOB value column (e.g. CEPA), the FTA certificate may be referred to ....
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....t of Revenue Central Board of Indirect Taxes & Customs International Customs Division Room No. 277 A, North Block, New Delhi-110 001 Dated the 8th June, 2024 To, The Chief Commissioner of Customs Mumbai Customs Zone - II JNCH, Raigad, Maharashtra. Sir, Subject: Verification of FOB value indicated on COO Certificates issued as per ASEAN-India Trade in Goods Agreement - Notification No. 189/2009-Cus (NT) dated 31.12.2009 - regarding. Please refer to your letter dated 27.05.2024 in respect of the above-mentioned subject. 2. The issue raised has been examined. In this regard, observations are as follows: i. As per extant provisions of CAROTAR, 2020 while the importer may be requested for supporting information but he is under no compulsion to submit commercially sensitive information such as the export invoice in case of third-party invoicing. The bill-to-ship-to business model ensures commercial confidentiality in global value chains. CAROTAR, 2020 does not require an importer to seek details, which may be business confidential. Rule 5(4) of CAROTAR 2020 provides t....
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.... of CAROTAR, 2020. Encl : as above. Yours Sincerely, Sd/- (Neetisha Verma) STO (ICD) Telephone no.(+91)1123094510 e-mail: [email protected]" 13. Consequent thereto and in supersession of the earlier public notice, a fresh public notice No.55/2024, dated 24th June 2024 was issued by the Commissioner of Customs, this time with the approval of the Commissioner of Customs, Respondent no. 2, setting out guidelines for verification under the CAROTAR, 2020 of the CoO certificates issued under various preferential trade agreements commonly referred as Free Trade Agreements prescribing the procedure, rectifying the public notice No. 33/2024 dated 20th March 2024. The said public notice No.55/2024, dated 24th June 2024 reads thus : "OFFICE OF THE COMMISSIONER OF CUSTOMS (NS-III), TURANT SUVIDHA KENDRA, GROUND FLOOR, JAWAHARLAL NEHRU CUSTOM HOUSE, POST: SHEVA, TALUKA: URAN, DIST: RAIGAD, MAHARASHTRA - 400 707 DIN: 20240678NV000000BA3C Dated:24.06.2024 Public Notice No. 55/2024 Subject: Guidelines for verification under CAROTAR 2020, of the Country of Origin Certificates (COO) issued under various Preferential Tr....
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....mount of freight and insurance will also need to be disclosed, either in the third country invoice or by submission of freight certificate and insurance receipt. However, this will not be applicable in case of FTA-COO which does not have FOB value column, e.g. FTA-COO issued under India-Japan CEPA. ii. If the INCOTERMS of third country invoices is FOB, and the FOB value indicated on the third country invoice is same as that indicated on the FTA-COO, the same prima facie indicates that the FOB value indicated on the FTA-COO includes the value addition (profit and other charges) of the third country supplier. The same is not permitted under the preferential Trade Agreements. In such cases, the importer shall include an explanation for the identical FOB values mentioned in the two documents, include an explanation for the identical FOB values mentioned in the two document, viz. FTA-COO and the third country invoice at the time of submission of self-assessed Bill of Entry. iii. If the Bill of Lading which indicates "FREIGHT PREPAID", and which is issued in favour of the Shipper located in the country of the origin (exporting country), then the importer will need to su....
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....umbai-II Copy to :- 1. The Chief Commissioner of Customs, Mumbai Zone-II, JNCH. 2. The Commissioner of Customs, Nhave Sheva-General, I, II, III, IV & V, JNCH 3. The Deputy Commissioner of Customs, EDI Section, JNCH for uploading on website. 4. Office copy." 14. It is thus clear that in supersession of the public notice No. 33/2024, dated 20th March 2024, a new procedure was prescribed for verification of eligibility for benefit to be availed under the relevant FTA on the scrutiny of documents in clauses 3(i) to (vi). 15. The Petitioner contends that insofar as the Bills of Entries (BoE) of the Petitioner are concerned, as per the requirements of law, the Petitioner made declarations referring to such notification under which preferential rate of duty was claimed. Also, the relevant documents namely the seaway bill, commercial invoice with packing list, inspection certificate, certificate of origin, and end user letter were uploaded by the Petitioner. The Petitioner contends that, however, the Turant Suvidha Kendra while defacing the CoO (FTA), raised additional requirements as per public notice No. 33/2024 (supra), which was in fac....
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....ms Division, Ministry of Finance, Department of Revenue, Government of India has stepped in and a clarification on certain aspects of origin procedures under free trade agreements is issued vide Instruction No. 23/2024-Customs dated 21st October 2024. The clarification as issued by CBIC is required to be noted, which reads thus: "Instruction No. 23/2024-Customs F.NO. 20000/6/2015-OSD(ICD) Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes & Customs International Customs Division Room No. 277 A, North Block, New Delhi Dated the 21st October 2024. To, All Principal Chief Commissioners/Chief Commissioners of Customs/Customs (Preventive)/Customs and Central Tax All Principal Commissioners/Commissioner of Customs/Customs (Preventive) All Principal Directors General/Directors General under CBIC. Madam/Sir, Subject : Clarification on certain aspects of origin procedures under free trade agreements (FTAs) - regarding. The Board is in receipt of various representations, citing difficulties encountered in import clearance where third-party invoicing, allowed un....
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.... 5. Further, it may be noted that both - the information being sought and the process of verification must be consistent with the trade agreement. It may also be noted that CAROTAR does not obligate the importer to provide commercially confidential information, pertaining to the exporter/third party. Also, CAROTAR does not require an issuing authority or a seller to use a specific or same currency for declaring value in COO and invoice respectively. 6. Rule 5(5) of CAROTAR provides that the proper officer may deny a preferential duty claim without causing further verification on the basis of the information and documents furnished by the importer and available on record. However, it is emphasised that if the concerned trade agreement does not allow for outright denial without causing a verification in accordance with provisions laid down in the subject agreement, the provision of the trade agreement shall prevail. CBIC vide its Instruction No. 19/2022-Customs dated 17.08.2022 has reiterated that in the event of conflict between the provisions of the trade agreement and CAROTAR read with Section 28DA, the provisions of the trade agreement shall prevail to the extent of....
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....der for the concerned officers and staff of this Custom House. 4. Any difficulty faced in the implementation of this Public Notice may be brought to the notice of the Assistant Commissioner of Customs (In-charge) of TSK at Email : [email protected] 5. This issues is with the approval of the Chief Commissioner of Customs, Mumbai Zone-II. Encl : As above. Sd/- (Sanjeev Kumar Singh) Commissioner of Customs, NS-III, JNCH" 20. Mr.Gandhi, learned counsel for the Petitioner would submit that in fact in view of the CBIC Instruction No. 23/2024-Customs, dated 21st October 2024, the directions qua under public notice No. 33/2024, dated 20th March 2024, were certainly not applicable. In such context, our attention was drawn to the said public notice, to submit that the preferential duty benefit has been rejected to the Petitioner simply on a mechanical application of public notice No. 33/2024, dated 20th March 2024. To buttress this contention, our attention is drawn to observations in the order passed by the Assistant Commissioner in the impugned order dated 12th June 2024. The relevant text of the order dated 12th June 2024 is required to be noted which rea....
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....of the free trade agreement with Thailand claimed by the Petitioner under the Bills of Entry, is now required to be reconsidered. 22. We may also observe that when it comes to the traders acting upon trade agreements entered between India with the other countries, it is necessary that instructions are issued, strictly in consonance with Section 151A of the Act, being solely the power of CBIC. We asked the learned counsel for the Respondents as to what is the source of power/jurisdiction in the Commissioner of Customs issuing a public notice and to point out a specific provision to that effect, invoked by the Commissioner to issue public notice No. 33/2024, which directly dealt with issues under the free trade agreements under which the importers were acting, also the requirements and procedure which was prevalent for a long period, was sought to be modified by the Commissioner under the Public Notice. However, we are not informed of any specific provision for issuance of any such public notice. In any event, public notices cannot be issued in some manner which would dilute the effect and benefit which would be derived under the free trade agreements or obliterate the provisions ....