TaxTMI 
TaxTMI 
2024 (6) TMI 1604
X X X X Extracts X X X X
X X X X Extracts X X X X
....0-12% Fat Content Alkalized Cocoa Powder Type 11 MK- 380, imported vide above B/E availing the benefit of Notification No. 46/2011, mentioned at Serial Number 155(1) falling under CTH 18050000. The B/E was self assessed by the importer and availed the benefit of Notification No. 46/2011 did 01.06.2011. The said Sr. No. under Appendix -1 of the Notification attracts NIL rate of duty. However as per the letter of Board bearing F. No. 456/12/2013- Cus. V dated 07.05.2014 regarding Import of Cocoa From Malaysia under FTAs, submitted through letter F. NO. S/2-Gen-PCA-87/2017-18/JNCH Dated 17.09.2018 regarding Theme based audit, action in respect of theme allocated to Nhava Sheva Audit Import of Cocoa Powder under FTAs, issued by the Commissioner of Customs NS-IV, Nhava Seva JNCH, Addressed to the Principal Commissioner of Customs Sabarmati Ahmedabad states that the Board has decided to deny the preferential benefit under Notification No. 46/2011-Cus & notification No. 53/2011-Cus, in case of import of Cocoa Powder from Malaysia. 3. When this attention was drawn to the importer, the query was raised to importer for denial of the benefit of the Notification No. 46/2011 dated 01.06.2011....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....91 of his order, the goods being "wholly obtained" and not das processed in Malaysia, Board's letter does not apply at all. 4. Board's letter is specific to two suppliers of Malaysia who refused to give details of value addition. It cannot be applied across all exporters of Malaysia as assumed by the Committee. No such conclusion can be drawn from the letter that it applies to all imports of Cocoa from Malaysia. 5. In fact, if the contention is correct, then the notification itself would have been amended to remove heading 1805 therefrom, whereas it continues to this day. 6. It is false that the respondent failed to satisfy that the goods are of Malaysian Origin. AA in Para 5 of his order has held that the respondent has supplied copies of Certificates of Origin in all cases which showed that the goods are wholly obtained in Malaysia. 7. The AA has not only relied upon the supplier website but also the trade statistics of Malaysian government to arrive at the conclusion that the Cocoa is of wholly Malaysian origin. 8. The very same Nava Sheva Custom House, who advised issuance of Show Cause Notice, has itself extended benefit of notifica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erritory of the importing Party if- (a) The goods are transported without passing through the territory of any non- Party, or, (b) The goods are transported through the femtory of any non-Party where .- (1) The transit entry is justified for geographical reasons or transport requirements: (ii) The goods have not entered into trade or consumption in the territory of such non-Party: (iii) The goods have not undergone any operation in the territory of such non-Party other than unloading and reloading or any operation required to keep the goods in good condition; and (iv) The goods have remained under the control of the customs authority of such non-Party." From the above rule it is mandatory that in case of any doubt about certificate of origin Custom Authority as Government of India must Request the Country Of Origin Certificate issuing authority i.e. in the present case Malai chamber of commerce Malaysia to check the certificate of origin. However in the present case admittedly without carrying out any such retroactive check merely on the basis of board circular the benefit of notification has been denied Which is absolutely i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the FTA. 8. In terms of the FTA, the Customs Tariff (Determination of Origin of Goods under Preferential Trade Agreement between the Government of Members Stats of the Association of South-East Asian Nations (ASEAN) and the Republic of India), Rules 2009 ("Customs Tariff Origin Rules") were notified on 31st December 2009. In exercise of the powers under the said Origin Rules, Exemption Notification No. 46/2011-Cus dated 1st June 2011 and Notification No. 12/2012-CE dated 7th March 2012 (amended) (hereinafter referred to "Exemption Notification") were issued. In terms of the Exemption Notification Nos. 46/2011-Cus and 12/2012-CE, the benefit of "NIL" rate of Customs Duty was granted to the goods imported by the members of the Association classifiable under Tariff Heading CTH 7113 19 10 if the goods are imported into India from a country listed in Appendix-I to the said notifications. Indonesia is one of the countries listed in Appendix-I. The exemption was granted in respect of specified goods, subject to the importer proving to the satisfaction of the Deputy Commissioner or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the ben....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r marine products taken from the high seas by vessels registered with the party and entitled to fly the flag of that party; (h) products processed and/or made on board factory ships registered with the party and entitled to fly the flag of that party, exclusively from products referred to in clause (g); (i) articles collected in the party which can no longer perform their original purpose nor are capable of being restored or repaired and are fit only for disposal or recovery of parts of raw materials, or for recycling purposes; and Explanation .- For the purpose of this clause, "article" means all scrap and waste including scrap and waste resulting from manufacturing or processing operations or consumption in the same country, scrap machinery, discarded packaging and all products that can no longer perform the purpose for which they were produced and are fit only for disposal for the recovery of raw materials and such manufacturing .or processing operations shall include all types of processing, not only industrial or chemical but also mining, agriculture, construction, refining, incineration and sewage treatment operations; (j) products obtained....
X X X X Extracts X X X X
X X X X Extracts X X X X
....procedures : (i) the request for a retroactive check shall be accompanied by the AIFTA Certificate of Origin concerned and specify the reasons and any additional information suggesting that the particulars given in the said AIFTA Certificate of Origin may be inaccurate, unless the retroactive check is requested on a random basis; (ii) the Issuing Authority shall respond to the request promptly and reply within three months after receipt of the request for retroactive check; (iii) In case of reasonable doubt as to the authenticity or accuracy of the document, the Customs Authority of the importing party may suspend provision of preferential tariff treatment while awaiting the result of verification. However, it may release the goods to the importer subject to any administrative measures deemed necessary, provided that they are not subject to import prohibition or restriction and there is no suspicion of fraud; and (iv) the retroactive check process, including the actual process and the determination of whether the subject good is originating or not, should be completed and the result communicated to the Issuing Authority within six months. While t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....notification. Notwithstanding any postponement, any verification visit shall be carried out within sixty days from the date of such receipt, or for such longer period as the parties may agree. (b) The importing party conducting the verification visit shall provide the producer/exporter whose goods are subject to the verification and the relevant Issuing Authority with a written determination of whether that goods qualify as originating goods. (c) The determination of whether the goods qualify as originating goods shall be notified to the producer/exporter, and the relevant Issuing Authority. Any suspended preferential tariff treatment shall be reinstated upon a determination that the goods qualify as originating goods. (d) If the goods are determined to be non-originating, the producer/exporter shall be given thirty days from the date of receipt of the written determination to provide any written comments or additional information regarding the eligibility of the goods for preferential tariff treatment. If the goods are still found to be non-originating, the final written determination issued by the importing party shall be communicated to the Is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thus 100% of gold refined is of Indonesian Origin. It confirmed that no gold dore bars were imported from any country. Further P-Antam also imported refined gold "on need basis", the inventory of which was recorded separately from the gold bars refined by P-Antam using Indonesian mined gold dore bars. It was confirmed that they keep an overall control in this regard wherein it issues certificate stating the percentage of gold used of Indonesian origin which is verifiable from the records. The letter further mentioned about the pre- exportation verification of the origin of the goods on 27th April 2015 and set out the findings, which are summarised as under: (i) P-Antam is a gold mining state-owned company in Indonesia and its sources of gold originate from the seven mines spread all over Indonesia owned by the different companies which were partly (whether in majority or minority) owned by it. (ii) It was further stated that under its Strategic Business UBPP Logam Mulia, P-Antam has been involved in the activities of refinery, and manufacturing of jewellery, minted coins since long and has been advantaged by the high accreditation of London Bullion Market Associat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtificates of origin (COOs) involved, four representative COOs were picked for verification. The Circular then states that in response there to, the Issuing Authority had forwarded a letter from P-Antam that "they do not maintain any inventory to indicate the origin of the gold ore or gold dore bars, which are smelted for the purpose of producing refined gold (raw material/input for the manufacture of gold jewellery)". The Circular further mentioned that the Issuing Authority has stated that the refinery annually produced 200 tons of refined gold "whereas the mining capacity of Indonesia as per information in the public domain is no more than 65 tons." The Indian Embassy in Jakarta, Indonesia informed that 37 tons of gold (57%) mined in Indonesia was exported in the form of Gold Powder, Lumps and Cast Bars. It was further stated that "in other words, the gold produced by the supplier in Indonesia has been made from mixing gold dore bars of foreign origin along with domestic origin without maintaining any records of origin." One such report received from Indonesia was enclosed as Annexures B and C to the said Circular. Since the manufacturers were using both, originating (wholly pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f India v. Karvy Stock Broking Limited 2015 (39) STR 705 (SC). Mr. Chidambaram submitted that the consequential actions pursuant to the impugned Circular were thus legally unsustainable. There was a possibility that the adjudication proceedings consequent to the SCN issued would be a pointless exercise since the superior authority had already issued a direction without permitting the subordinate authority to exercise discretion and come to an independent conclusion. Reliance was placed on the decisions in Filterco v. CST, MP 1986 (24) ELT 180 (SC), TVL Pizzeria Fast Foods Pvt. Ltd. v. CCT Ezhilagam 2005 (192) ELT 52 (Mad) and Vistar Construction Pvt. Ltd. v. Union of India 2013 (31) STR 129 (Del). It was submitted that the members of the Petitioner Association had, in the present case, produced before the Respondents COOs issued by the competent authority, which had been duly accepted and verified by the Indonesian authorities. They had also furnished declarations from the exporter which confirmed that the goods were of Indonesian Origin as per the FTA. 20. Mr. Chidambaram submitted that the impugned Circular was based on factually erroneous premises. The Circular stated t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 16 of the said procedures, requested for a retroactive check to the Indonesian authorities which had already been carried out and shared with the Respondents. In terms of Article 17, where the Respondents were not satisfied with the outcome of the retroactive check, there would be a request for verification visits. Instead, here the Respondents have disputed the explanations given by the Indonesian Authorities and not even requested for verification visits, thus not following the Operating Procedures. In any event, any issue or dispute between the two countries with respect to the correctness of explanations given by the Indonesian authorities, could not be the basis to deny preferential customs duty treatment to the members of the Petitioner Association. On their part, the members of the Petitioner Association had produced the necessary COOs which were also verified by the Respondent authorities at the time of clearance of imported goods. It was reiterated that the authenticity of the said COOs had not even been disputed by any authority. Therefore, it was irrational and unreasonable for CBEC to direct that the benefit of preferential duty should be denied to the members of the P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Fast Foods Pvt. Ltd. v. CCT, Ezhilagam (supra). It was submitted that this is also contrary to the Exemption Notification which provides for the manner in which the Customs Officers ought to exercise their satisfaction for the purpose of ascertaining the Country of Origin of the imported goods. 27. It was also pointed out that the Respondents ought to have followed the provisions of the CPDA Regulations. Regulation 2 (2) thereof provides for maximum payment of only 20% of duty differential under Provisional Assessment. Therefore, the insistence on furnishing a bank guarantee for the entire differential duty was illegal and was liable to be quashed. Reliance was placed on the decision in Bhaiya Fibres v. ADGRI (2012) 281 ELT 396 (Del) and Rashmi Metallaiks v. Union of India 2015 (316) ELT 455 (Cal). It was finally submitted that since the impugned SCN was on the basis of an invalid instruction, the bar of the existence of an alternative remedy would not apply. Reliance was placed on the decision of this Court in Vistar Construction Pvt. Ltd. v. Union of India 2013 (31) STR 129 (Del) and Indian Institute of Aircraft Engineering v. Union of India 2013 (30) STR 689 (Del). It w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fferential emerges from the Regulation 4 so as to adequately secure the revenue and ensure uniformity of provisional assessment across all ports. There are separate requirements under Regulation 2(2) and. Regulation 4. 30. Mr. Dubey then referred to the relevant rules and to the annual report of P-Antam wherein the production of gold in 2014 was noted as 2342 kg and claim 9% compared to 2013. The actual quantity of gold sales was in the range of 9978 kg. A reference was made in the additional affidavit dated 20th February 2016 of the Respondents in Writ Petition (Civil) No. 936 of 2016 to the affidavit dated 2nd November 2015 of Mr. Naresh Sharma, Director of M/s. J.B. Overseas wherein a Mr. Umed Singh was named as the other Director. Further reference was made the statement of Mr. Umed Singh under Section 108 of the Act dated 23rd December 2015 wherein he denied knowledge of M/s. J.B. Overseas or that he was its Director. However in the reply- affidavit filed by the Petitioner in Writ Petition (Civil) No. 936 of 2016, the abovementioned statements of Mr. Naresh Sharma and Mr. Umed Singh were stated to have been retracted. The ASEAN-FTA 31. To begin with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....." 34. Rule 3 set out what can be construed as "wholly produced or obtained products". Rule 4 specifies what can be "not wholly produced or obtained products". Under Rule 4 (a) a product shall be deemed to be originating if "the AIFTA content is not less than 35 per cent of the FOB value"; and "the non-originating materials have undergone at least a change in tariff sub-heading (CTSH) level of the harmonized system", provided that "the final process of the manufacture is performed within the territory of the exporting party." The formula of calculating 35 per cent AIFTA content has been set out in Rule 4 (b) of the AIFTA Origin Rules. The method of calculating the AIFTA content is also set out in Appendix A to the ASEAN-FTA. Operational Certification Procedures for AIFTA Rules of Origin 35. Appendix D to the ASEAN FTA sets out the Operational Certification Procedures for the Rules of Origin for the AIFTA. Inter alia it envisages the pre-exportation examination and the issuance of AIFTA Certificate of Origin (Article 7 therein). Article 7 (c) and (d) which are relevant for the present purposes read as under: " Issuance of AIFTA Certificate of Orig....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of fraud". 39. If the importing party is unhappy with the outcome of the retroactive check, then in terms of Article 17 (a) it may, under exceptional circumstances, request the exporting party and seek permission to make verification visits. However, prior to conducting a verification visit, the importing party has to deliver a "written notification" in terms thereof. The written notification has to be "as comprehensive as possible" and has to include the name of the customs authority issuing the notification, name of the producer/exporter whose premises are to be visited, the proposed date of the verification visit, the names and designation of the officials performing the verification visit. The very purpose of Article 17 is to give an opportunity to the country of the importing party to satisfy itself as to whether the goods are actually originating in the country of its export. Even where the goods are determined as non-originating, in terms of Article 17 (d), the producer/exporter is to be given 30 days from the date of receipt of the written determination to provide any written comments or additional information. The entire verification visit process is to be carri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in Annexure III annexed to these rules." 42. Annexure III to the Customs Tariff Origin Rules sets out the Operational Certificate Procedures ("OCP"). Rule 7 (c) of the OCP mirrors what is provided in the ASEAN-FTA itself. It also sets out more or less the same time limitation within which the disputes need to be resolved. Rule 7 (c) of the OCP reads as under: "7 (c) In case where an AIFTA Certificate of Origin is not accepted by the Customs Authority of the Importing party, such AIFTA Certificate of Origin shall be marked accordingly in box 4 and the original AIFTA Certificate of Origin shall be returned to the Issuing Authority within a reasonable period but not to exceed two months. The Issuing Authority shall be duly notified of the grounds for the denial of preferential tariff treatment." 43. The procedure for verification stated in Rule 16 to the OCP is identical to that provided in the ASEAN-FTA. In other words there has been a whole scale adoption of the provisions set out in Appendix D to the ASEAN-FTA into the domestic law. Failure by Respondents to resort the detailed verification procedure 44. In the present case, the customs ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l that the export of mining ore from Indonesia is prohibited. It was added that P-Antam had recorded the previous processing of about 200 MT of gold dore. Therefore, a clear distinction was made from the beginning between refined gold and gold dore. 46. It appears that an erroneous interpretation of the above clarification issued by P-Antam has led to the impugned Circular dated 6th October 2015 being issued. The impugned Circular does appear to proceed on surmises which do not find support in any of the material that has been produced by the Respondents before the Court. For e.g., the impugned Circular proceeds on the basis that in the letter dated 12th June 2015 it was stated that "as mined gold is used in manufacturing jewellery of aforementioned COO, so the origin of goods is easily verified and hence no pre-exportation verification has been done." Further, in the letter dated 27th April 2015 it was stated that "the gold has been sourced substantially from mine PT ANTAM (Pesero) Tbk Gold Mining." It was further stated that "once the material is arrived in refinery it becomes a single inventory and difficult to ascertain exactly the flow of gold." 47. In the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a v. Madras Steel Re-Rollers Association 2012 (supra) explains that the CBEC is empowered to issue Circulars for the 'guidance of quasi-judicial authorities'. Also in CCE, Vadodara v. Dhiren Chemical Industries (supra) it was explained that the CBEC could disseminate interpretative findings or procedures or such other instructions to its officers for 'ensuring equity and uniformity in assessment practices'. However, on that pretext the power under Section 151A cannot be used to whittle down the scope of an exemption. This has been explained in a large number of decisions which will be discussed hereafter. 50. In Union of India v. Karvy Stock Broking Limited (supra) a circular was issued by the CBEC interpreting a notification issued by the Government exempting 'Business auxiliary services provided by a commission agent' from the levy of service tax under sub-Section (2) of Section 66 of the Finance Act, 1994. The said circular clarified that the commission received by distributors on mutual fund distribution would be liable to service tax as it would not fall within the expression 'business auxiliary services'. That circular was struck down ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... with respect to the levy of duty thereon". The above provision does not envisage any amendment being made to an exemption notification that may have been issued in exercise of powers under Section 25 (1) of the Act. This Court in the above decision also referred to the decision in Modi Rubber Limited v. The Board of Central Excise and Customs1978 (2) ELT 127 (Del.) wherein it was held that CBEC cannot impose any condition for availing exemption without amending the original exemption notification. The impugned circulars are ultra vires Section 151A 54. Examined in light of the legal position explained in the above decisions, it is plain that the impugned Circulars dated 6th October 2015 and 20th January 2016 do in fact whittle down the scope of the exemption available for import of gold jewellery from Indonesia, across the board, only because, according to the Department, the COOs issued by the Issuing Authority in Indonesia could not be verified. The Circular dated 6th October 2015 requires an Officer of the Customs who has issued a SCN not to pass orders of provisional assessments. It requires the original COOs along with "appealable orders" to be sent to the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o exercise the power conferred upon him as per his own discretion. This is the essence of judicial and quasi judicial function. The authority exercising such powers cannot be influenced by any directions, instructions or the Circulars that may be issued by any other agency. Consequently, the Circular issued by the Respondents cannot be permitted to interfere with the discretion of the judicial and quasi judicial authorities." 58. Apart from the fact that the SCN suffers from the above fatal flaw, it has been issued overlooking the COOs produced by the said importer verified by Issuing Authority. Therefore, the said SCN and the proceedings consequent thereto are held to be invalid and unsustainable in law. 59. In view of the above conclusions and, in particular, since the SCN has been issued on the basis of an invalid Circular, relegating the Petitioners to the alternative remedy of statutory adjudication and consequent appeal would be a pointless exercise. The decisions in Filterco v. CST (supra), TVL Pizzeria Fast Foods Pvt. Ltd. v. CCT Ezhilagam (supra) and Vistar Construction Pvt. Ltd. v. Union of India (supra) support the case of the Petitioners in this regard....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the value addition not being fulfilled by the Sri Lankan supplier. To this extent, there is no factual support for the observation made in the impugned order. Further, we note that the valuation of Zinc Ingots as ascertained by the impugned order has ro relevance to question the certificate issued by the Competent Authority of Sri Lankan Government. As such, we find the non fulfilment of condition under Rule 7 (a) could not be invoked by the Original Authority, in the facts of this case. Further, it is also recorded by the Original Authority that the Director of the importing Indian company in the statements gave details which supported the allegation of incorrect data submitted by the Sri Lankan supplier. We note that there is no such admission by the Director in his striements. Even otherwise, we note that certificate of origin and the data submitted to get such certificates cannot the questioned based on statements of the importers. We find no record to the effect that the country of origin certificates issued by the Sri Lankan Government has been questioned by the Indian Authorities and follow up after import was done in order to cancel or recall the same. We note that the iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....loading or any operation required to keep the goods in good condition; and, (iv) The goods have remained under the control of the customs authority of such non-Party." From the above rule it is mandatory that in case of any doubt about the authenticity of the certificate of origin. The Customs Authority of Government of India must request the Issuing Authority i.e. in the present case the Malay Chamber of Commerce Malaysia to check the authenticity of the certificate of origin. 4.1 We find that the department, when made an allegation about the country of origin did not follow the procedure prescribed under Rule 9 of Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and Malaysia) Rules 2011. Therefore, merely on the basis of the bill of lading whereby, it was inferred that the goods were originated from China cannot be accepted. 4.2 Moreover, the discrepancy was noticed only in respect of bill of lading related to 2 certificate of origin. Therefore the allegation in respect of other 3 certificates of origin is without any basis. Under the identical scheme of imp....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... they had indicated that for the expansion of the fertilizer project they needed an extra item of capital goods, namely, 6MW Captive Power Plant. In their application, the assessee had made it clear that the fertilizer project was dependant on continuous flow of electricity, which could be provided by such Captive Power Plant. Therefore, it was not open to the Revenue to reject the assessee case for nil rate of duty on the said item, particularly when the certificate says so. In the judgment of this Court in the case of Tullow India Operations Ltd. (supra), this Court held that essentiality certificate must be treated as a proof of fulfilment of the eligibility conditions by the importer for obtaining the benefit of the exemption notification. We may add that, the essentiality certificate is also a proof that an item like Captive Power Plant in a given case could be treated as a capital goods for the fertilizer project. It would depend upon the facts of each case. If a project is to be installed in an area where there is shortage of electricity supply and if the project needs continuous flow of electricity and if that project is approved by the Sponsoring Ministry saying that such ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on Nos. 24/91 and 5/93-C.E. The concession of notification is available when the installed capacity is not exceeding 1,98,000 T.P.A. It is admitted fact that the Director of Industries, Madhya Pradesh, who is designated as a competent authority in the Notification itself has more than once certified the installed capacity of the appellant to be 1,98,000/- T.P.A. As observed by the Hon'ble Supreme Court in normal circumstances such a certificate is to be acted upon. The Hon'ble Supreme Court directed this Tribunal to examine the various material relied on by the Revenue to contest the appellant's claim for exemption. We perused of the impugned order which was passed after the specific direction of this Tribunal to approach the competent authority for re-examining all the facts, material, evidence, furnished by both the sides to certify the installed capacity. As per the direction of this Tribunal the Director of Industries was addressed by the Adjudicating Authority on 5-9- 2002 along with copies of 11 documents (Para 12 of the impugned order) which are relied upon by the Revenue to contest the correctness of certificate issued by the competent authority. In response, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not be discounted. There is no evidence on record that designated authority of Bangladesh under SAPTA Rules was maliciously involved with the supplier of cloves and the Appellant. 5. Adjudicating Authority has relied upon some indigenous sources to conclude that neither the imported goods are "processed cloves" nor the value addition to extent claimed is justified. Appellant asked for the cross examination of Shri Sunil Doletram Chhabria, Shri C.J. Jose, Dr. J. Chakraborty and Shri Pratab Chakroborty as per para-18 of Appellants reply dated 05.12.2005 to the show cause notice dated 26.08.2005. These facts have been duly reflected in the submissions of the main appellant in the Order-in-Original dated 28.02.2007 but the request of cross examination of the witnesses has been conveniently avoided by the Adjudicating Authority and no observations are given as to why request of the appellant for cross-examination is not acceptable. In the absence of cross examination the evidentiary value of the relied upon witnesses is lost. Secondly, Shri Doletram T. Chhabria is also an exporter and importer of spices whose business is threatened by concessional rate on cloves under SAPTA Rul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erce and intercourse throughout the territory of India. It is argued that article 304(a) cannot come to the rescue of the State for justifying this levy inasmuch as article 304(a) provides that the legislature of a State may by law impose on goods imported from other States any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced. In support of this contention, the learned counsel has relied on State of Madhya Pradesh v. Bhailal Bhai, Firm A.T.B. Mehtab Majid and Company v. State of Madras and State of Rajasthan v. Ghasiram Mangilal. On the other hand, Mr.Goswami, learned counsel for the State of Assam, contends that there is no discrimination between onion imported from outside and onion grown in the State of Assam inasmuch as both are subjected to levy of sales tax. The argument in this connection has centred round the definition of the word 'processed'. It is urged by the learned counsel for the petitioner that onion cannot be processed inasmuch as it is not subjected to any mechanical process after it has been removed from the earth. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....over the certificate of origin given by the designated authority under SAPTA Rules. Only an appropriate authority of Bangladesh could have certified as to what could be the value addition, after satisfying about the nature of processing activities done by the supplier and the extent of expenses incurred by such supplier in carrying out the activities of cleaning, handling, storage, sorting, packing etc .. " B) In the case of R. S. Industries (Rolling Mills) Ltd. (supra) similar view was expressed by the coordinate bench of this Tribunal, the relevant part of the order is reproduced below: "5. We have heard both the sides and perused the appeal records. We note that the denial of exemption, as claimed by the importer, is on the ground that the value addition in Sri Lanka fall below 35%. We note that the certificates of origin have been issued by Competent Authority of Sri Lankan Government. The same is not in dispute. We already note that the certificate were not recalled or cancelled by the issuing authority. The only ground for denial of exemption is, the Zinc Ingots value subjected to assessment by Sri Lankan customs appears to be low. For this, support was draw....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Customs (Imports), JNPT." C) This Tribunal in the case of M/s. MJ Gold Pvt. Ltd. (supra) dealing with the similar issue, has passed the following order: 5. Having heard the rival contentions, it is observed that vide the order under challenge the appellant is denied the duty exemption benefit for importing gold jewellery from Indonesia, despite Indonesia being the country in Appendix of the Notification No. 046/2011 dated 01.06.2011 which exempts the imports from Indonesia to such amount of duty as is mentioned in 4 th column of said notification. Foremost the Notification is perused. It is observed that the Notification exempts the goods of the description as is specified in Column 3 of the Table appended thereon and falling under Chapter sub heading or tariff item of the first schedule to the Customs Tariff Act, 1985 as is specified in the corresponding entry in column 2 of the said table, from so much of the duty of customs leviable thereon as is in excess of the amount collected at the rate specified in column 4 of the said table, when the goods imported into the Republic of India when the goods from a Country listed in Appendix I. As already observed abov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Authority at the port or place of importation. The duplicate shall be retained by the Issuing Authority in the exporting party. The triplicate shall be retained by the importer. The quadruplicate shall be retained by the exporter. (c) In cases where an AIFTA Certificate of Origin is not accepted by the Customs Authority of the importing party, such AIFTA Certificate of Origin shall be marked accordingly in box 4 and the original AIFTA Certificate of Origin shall be returned to the Issuing Authority within a reasonable period but not to exceed two months. The Issuing Authority shall be duly notified of the grounds for the denial of preferential tariff treatment. (d) In cases where an AIFTA Certificate of Origin is not accepted, as stated in paragraph (c), the Issuing Authority shall provide 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." 8. Apparently and admittedly, the Customs Authority whil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntry could not have been used by the supplier / manufacturer for producing the imported gold jewellery. It was held that the Notification provides for detailed verification process in case of reasonable doubt, it is not the case of the department that information was inconsistent with the certificate. In the absence thereof, it was held that the Adjudicating Authority could not have gone beyond the provisions of Notification. 10. I finally observe that the impugned Notification is a kind of preferential trade arrangement between States of Association of Southeast Asian Nations (ASEAN) and the Republic of India in order to facilitate free movement of trade. If the exemption sought under the applicable rules is denied on one or the other pretext that too based merely on assumptions and presumptions, it will hamper the free movement of trade between agreeing nations. Same is highly uncalled for and would rather render the entire exemption Notification otiose more so when on the face of the record, the Certificate of Origin is otherwise not disputed. Above all, the substantial benefit as that of exemption from payment of duty shall not be denied merely on procedural lapse. ....