Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Tuticorin vs M/S. Sterlite Industries (India) Ltd on 28 October, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/S/41810 to 41817/2013 and C/41988 to 41995/2013
C/S/41818 to 41847/2013 and C/41996 to 42025/2013
C/S/40432/2014 and C/40317/2014
C/S/40483 to 40503/2014 and C/40318 to 40338/2014
C/S/40685 to 40687/2014 and C/40485 to 40487/2014
(Arising out of Orders-in-Appeal No. 120-127/2013 dated 18.6.2013, Order-in-Appeal No. 90 to 119/2013 dated 18.6.2013; Order-in-Appeal No. 216/2013 dated 11.12.2013; Orders-in-Appeal No. 194 to 214/2013 dated 22.11.2013 and Orders-in-Appeal No. 217 to 219/2013 dated 18.12.2013 passed by the Commissioner of Customs (Appeals), Trichy)
For approval and signature:
Honble Shri P.K. Das, Judicial Member
Honble Shri R. Periasami, Technical Member
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Members wish to see the fair copy of the Order?
4. Whether order is to be circulated to the Departmental authorities?
Commissioner of Customs, Tuticorin Appellant
Vs.
M/s. Sterlite Industries (India) Ltd. Respondent
Appearance Shri M. Rammohan Rao, DC (AR), for the Appellant Shri Bipin Kumar Jain, Advocate and Shri G. Krishnamurthy, Advocate for the Respondent CORAM Honble Shri P.K. Das, Judicial Member Honble Shri R. Periasami, Technical Member Date of Hearing: 28.10.2014 Date of Decision: 28.10.2014 Final Order No. 40904-40966 / 2014 Per P.K. Das A common issue is involved in these applications and therefore all are taken up together for disposal. As the issue lies in a narrow compass, after disposing the stay applications, we proceed to dispose of the appeals itself at the stage of stay petition hearing.
2. Revenue filed these appeals against the orders of the Commissioner (Appeals) whereby the appeals of the respondents were allowed and the orders of the adjudicating authority were modified only to the extent of allowing the benefit under Notification No.101/2007-Cus. dated 11.9.2007 and Notification No. 46/2011-Cus. dated 1.6.2011.
3. After hearing both the sides and on perusal of the records, we find that the respondents are engaged in the manufacture of Copper Anode, Copper Cathode, Continuous Cast Copper Wire Rod and regularly importing Copper Concentrate for use in their manufacturing activities. In the present case, the respondents filed 63 into-bond Bills of Entry for clearance of copper concentrate supplied by different companies at Chile and Indonesia during the period 2007 to 2012. The respondents requested for provisional assessment under Section 18 of the Customs Act, 1962 as they were unable to produce the final invoice and the original assay certificate for the purpose of determination of value and quantity. The adjudicating finalized the assessment by 63 adjudication orders, where he has denied the benefit of exemption claimed under Notification Nos. 101/2007 and 46/2011 on the ground that the certificates of origin presented by the respondents are not in conformity with Notification No.189/2009-Cus. (NT) dated 31.12.2009 in respect of import from Indonesia and No. 84/2007-Cus. (NT) dated 17.8.2007 in respect of import from Chile amongst others. The respondents filed appeals before the Commissioner (Appeals) against denial of the benefit of exemption notification amongst others. Commissioner (Appeals) by the impugned orders, modified the orders of the lower authority to the extent of allowing the benefit of exemption Notifications. Hence, Revenue filed these appeals.
4. For the purpose of proper appreciation of the facts of the cases, we reproduce the relevant portion of the Order-in-Original No.309/2013 dated 14.2.2013 as under:-
M/s. Sterlite Industries (India) Ltd. Tuticorin (hereinafter referred as importer) have filed a In-bond Bill of Entry No. 4045746 dated 12.7.2011 through their CHA M/s. Villavarayar and son for the clearance of copper concentrate falling under CTH 26 03 0000 for the declared quantity of 11000.000 Wet Metric Ton. The said copper concentrate was supplied by M/s.J.P. Morgan Metals & Concentrate LLC vide provisional invoice dated 1.7.2011 for provisional payment of USD 27764163.91 with ICICI bank reference no. 0544MFC00043412. The importer requested for provisional assessment for the subject goods under Section 18 of the Customs Act, 1962, as they were unable to produce final documents such as 1. WSMD (Weight Sampling Moisture Determination) report, 2. Suppliers lot wise assay report (Lab report), 3. Buyers assay certificate, 4. Umpires assay in case any major difference in content in any lot between suppliers assay and buyers assay, 5. Final assay certificate, 6. Statement of facts given by the master of the vessel, 7. Final invoice and etc. As per the terms and conditions of the Contract No. 3129 dated 25.3.2011 entered into between the supplier M/s. J.P. Morgan Metals & Concentrate LLC and the buyer M/s. Sterlite Industries (India) Ltd., Unit Deductions / Payable Contents, Treatment & Refining Charges and Freight clauses are considered for arriving at transaction value for the purpose of Final assessment of the goods.
Discussion:
2. With regard to the import of Copper Concentrate the following issues are mandate discussion for the purpose of clarify in finalization, i. Leviability of duty of excess/less quantity imported ii. Basis for transaction value iii. Leviability of duty on other elements present in the consignment.
5. The adjudicating authority finally assessed Bills of Entry detail discussions on the issue of leviability of duty of excess/less quantity imported, based on transaction value and other elements after considering the various documents placed by the respondents, under the provisions of Section 18 of the Customs Act, 1962. In addition, it has been ordered that the Certificate of Origin presented by the respondents are not in conformity with Rule 13 of the said Notifications. By the impugned order, Commissioner (Appeals) observed the Bills of Entry were not provisionally assessed for want of Certificate of Origin. It is further observed that since the Certificate of Origin were produced at the time of importation and therefore, it was not mentioned as required document for provisional assessment. Apart from that the adjudicating authority accepted the documents relating to Chile / Indonesia origin and therefore the finding of the adjudicating authority is misconceived, inconsistent an contradictory.
6. The main contention of the Revenue is that the respondents had not placed the Certificate of Origin before the adjudicating authority at the time of finalization of the assessment. The learned AR for Revenue submits that at the time of finalization of assessment, the originals of the Certificate of Origin were not produced in 6 cases. In some cases, invoice number and date were not mentioned in the prescribed column of Certificate of Origin; the Certificate of Origin was issued after prescribed time of 60 days in 3 cases and invoice number was not mentioned in 2 cases; in one case, the certificate was not in A4 size as required under the Rules; in 29 cases, the blank space had not been scored off; in 39 cases, the word bulk was not mentioned against the description of goods copper concentrate and in 10 cases they have produced the photocopy of the Certificate of Origin. He submits that it is an essential requirement for finalization of the assessment to produce the Certificate of Origin before the adjudicating authority. Hence, the adjudicating authority rightly denied the benefit of exemption Notifications. It is further contended that the Commissioner (Appeals) merely proceeded on the basis that the Certificate of Origin was placed at the time of warehousing for filing the into-bond Bills of Entry. According to the learned AR, the respondent should have placed the Certificate of Origin before the adjudicating authority, which were not complied with.
7. The learned counsel for the respondents submits that the Revenue had not disputed the observation of the Commissioner (Appeals) that the respondents placed the Certificate of Origin at the time of warehousing of the goods, which is an essential requirement for claiming the exemption as per notifications. He further submits that it is clearly apparent from the adjudication orders that the provisional assessment was obtained only for finalization of the value and quantity. The adjudicating authority had gone to the new issue which was beyond the provisional assessment. He also filed written submission.
8. We find that the respondent filed 60 Bills of Entry for import from Chile under Notification No. 101/2007-Cus. dated 11.7.2007 and 3 Bills of Entry for import of ASEAN countries under Notification No. 46/2011-Cus. dated 1.6.2011.
8.1 Notification No. 101/2007-Cus. (supra) allowed concessional rate of duty of specific products imported from Chile. As per proviso to the said Notification, the importer shall proves to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of the Republic of Chile, in accordance with provisions of the Determination of Origin of Goods under the Preferential Trading Agreement between the Republic of India and the Republic of Chile Rules, 2007, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.84/2007-Customs (N.T.), dated the 17th August, 2007.
8.2 Notification 46/2011-Cus. (supra) provides concessional rate of duty for specified goods from Malaysia, Singapore, Thailand, Vietnam, Myanmar, Indonesia, Brunei Darussalam, Laos, Philippines and Cambodia (ASEAN). As per proviso to the said notification, the importer shall prove to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, that the goods in respect of which the benefit of this exemption is claimed are of the origin of the countries as mentioned in Appendix I, in accordance with provisions of the Customs Tariff [Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of Member States of the Association of Southeast Asian Nations (ASEAN) and the Republic of India] Rules, 2009, published in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 189/2009-Customs (N.T.), dated the 31st December 2009.
8.3 The Govt. of Republic of India and the Govt. of Republic of Chile entered into a preferential trade agreement in conformity with the relevant agreements of the World Trade Organization (WTO). As per the said agreement, the Central Government by Notification No.84/2007-Cus. (NT) dated 17.8.2007, framed Rules for Determination of Origin of Goods under the Preferential Trading Agreement between The Republic of India and the Republic of Chile Rules, 2007 (hereinafter referred to as Rules 2007). This notification was issued in exercise of the powers conferred by sub-section (1) of Section 5 of the Customs Tariff Act, 1975. Rules 2007 provides the production of Certificate of Origin for importation of the goods. For the purpose of proper appreciation of the case, the relevant portions of Rules, 2007 are reproduced below:-
Rule 15. Certification of Origin
1. The Certificate of Origin is the document that certifies that goods fulfil the origin requirements as set out in these Rules so that they can benefit from the preferential tariff treatment as foreseen in this Agreement. The said Certificate is valid for only one importing operation concerning one or more goods and its original or in exceptional cases a copy of the original of which has to be submitted within 30 days from the date of clearance of goods in the importing Party and shall be included in the documentation to be presented at the customs authorities of the importing Party.
xxxxx xxxxx xxxx xxxx xxxxx SECTION IV Control and Verification of Certificates of Origin Rule 17.
1. Regardless of the presentation of an origin certificate in accordance with the Rules of Origin under these Rules, the customs authorities of the importing Party may, in the cases of reasonable doubt, request the relevant government authorities of the exporting Party any additional information necessary for the verification of the authenticity of a certificate, as well as the veracity of the information contained therein. This shall not preclude the application of the respective national legislation relating to breach of customs law.
2. Compliance with the request for additional information according to this Article shall only be made with reference to the registers and documents available in Government offices or institutions authorized to issue origin certificates. Copies of the documentation necessary for the issuing of origin certificates can be made available.
3. This Article, however, does not restrain the conclusion of Customs Cooperation Agreements between the Parties.
4. The reasons for the doubts concerning the authenticity of the certificate or the veracity of its data shall be put forward in a clear and concrete way. For this purpose, the consultations thereon shall be carried out by a specific office of the customs authorities designated by each Party.
5. The customs authorities of the importing Party shall not suspend the importation operations of the goods. However, they may deny preferential tariff treatment, request a guarantee in any of its modalities or may take any action necessary in order to preserve fiscal interests, as a pre condition for the completion of the importation operations.
6. If a guarantee is required, its amount shall not be higher than the value of the applicable custom duties concerning the importation of the product from third countries, according to the legislation of the importing country.
Rule 18 The competent authorities from the exporting Party shall provide the requested information according to Article 17 within thirty (30) days, from the date of the receipt of the request. Such period can be extended through mutual consultation for a period no more than thirty (30) days in justified cases. If this information is satisfactory, the said authorities shall release the importer from the guarantee referred to in Article 17 within thirty (30) days or shall promptly refund the duty paid in excess, in accordance with domestic laws of the Parties.
xxxxx xxxxx xxxx xxxx xxxxx Rule 20 In the cases in which the information requested under Article 17 is not provided within the deadline established in Article 18 or is insufficient to clarify any doubt concerning the origin of the good, the competent authorities of the importing Contracting Party may initiate an investigation on the matter within sixty (60) days, from the date of the request for the information.
xxxxx xxxxx xxxx xxxx xxxxx Rule 26 In the cases in which the information or documentation requested to the competent authorities of the exporting Party is not produced within the stipulated deadline, or if the answer does not contain enough information or documentation for determining origin, the authenticity or veracity of the origin certificate under investigation, or still, if the producers do not agree to the visit, the competent authorities of the importing Party may consider that the products under investigation do not fulfil the origin requirements, and may, as a result deny preferential tariff treatment to the products mentioned in the origin certificate under investigation according to Article 20, and thus conclude such investigation.
Rule 27 1 The competent authorities of the importing Party shall engage to conclude the investigation in a period not more than ninety (90) days, from the date of the receipt of all the information requested in accordance with Article 23.
2. lf it is considered that new investigative actions or the presentation of more information are necessary, the competent authorities of the importing Party shall communicate the fact to the competent authorities of the exporting Party. The term for the execution of such new actions or for the presentation of additional information shall be not more than ninety (90) days, from the date of the receipt of all the additional information, according to Article 23.
3. If the investigation is not concluded within ninety (90) days after all the information has been provided, the importer shall be released from the payment of the guarantee, regardless of the continuation of the investigation. Duties paid in excess shall be promptly refunded in accordance with the domestic legislation of the Parties.
9. We find that Rules 2007 for determining the origin of goods prescribed particular procedure for verifying the genuineness of the Certificate of Origin (Notification No. 84/2007-Cus. (NT) dated 17.8.2007 for import from Chile and No. 189/2009-Cus. (NT) dated 31.12.2009 for import from Indonesia). Section IV of the Rules 2007 provides control and verification of the Certificate of Origin. On harmonious reading of Rule 17 to Rule 36, it is clear that if the proper officer of customs has reasonable doubt about the certificate or the information contained therein, he should spell out in writing the reasons for such doubt and forward the same through the designated officers in the two Governments for due discharge and in the meanwhile allow clearance of the goods by securing the interest of revenue. It has also framed the time for verification of the Certificate of Origin insofar as the competent authority in the exporting country must clarify the matter within a maximum period of 60 days. On receipt of the clarification, the guarantee should be released within 30 days. In the present case, we find that the goods were imported during the period 2007 2012. On perusal of the adjudication order, it is seen that the provisional assessments were resorted to in respect of valuation and quantity as the Buyers assay certificate, Final assay certificate, statement of facts given by the master of the vessel, Final Invoice etc. were not available. There is no whisper in the adjudication order that either any proceeding was initiated as per the said Rules, 2007 in respect of verification of the Certificate of Origin or provisional assessment was resorted to for want of Certificate of Origin.
10. In this context, we find that the Commissioner (Appeals) had given detail findings in the impugned orders. For proper appreciation of the case, we reproduce the relevant portion of the Order-in-Appeal No. 120 127/2013 dated 18.6.2013, as under:-
4.1 Whereas the lower authority has stated in the findings that the certificate is no in conformity with Rule 15(1) of Notification No. 84/2007 (NT) dated 17.8.2007. The Rule 15(1) is read as follows The certificate of origin is the document that certifies that goods fulfill the origin requirements set out in these rules so that they can benefit from the preferential tariff treatment as foreseen in agreement. The said certificate is valid for only one importing operation concerning one or more goods and its original or in exceptional cases a copy of the original of which has to be submitted within 30 days from the date of clearance of goods in the importing party and shall be included in the documentation to be presented at the customs authorities of the importing party. From the above, it is observed that (1) the certificate is valid for only one importing operation concerning one or more goods (2) original or in exception cases a copy of the original has to be submitted within 30 days from the date of clearance of goods in the importing party and (3) certification of document to be presented at the custom authorities of the importing party are the conditions to be followed by the appellant. The lower authority has not specifically discussed under what condition the Certificate of Origin is not in conformity with the Rule 15(1). Further, it is seen from the records that the impugned goods were provisionally assessed for want of documents like moisture content, supplier / buyer / umpire / final assay report, statement of facts of master of the vessel and final invoice. The above Bills of Entry are not provisionally assessed for want of County of Origin certificate. Since the Country of Origin has been produced at the time of provisional assessment the same has not been mentioned as a required document for finalization of provisional assessment. The exemption has been allowed after verification of required certificate at the initial stage, i.e. on provisional assessment. The lower authority has not disputed that the impugned goods have been imported from Chile origin. Further, the lower authority has not presented any apparent findings to deny the exemption claimed by the appellant. In view of the above, the appeals are allowed and orders of the lower authority are liable to be modified to the extent of allowing exemption benefit under Notification No. 101 dated 11.9.2007 (S. No. 172) only.
11. We find that the adjudicating authority had not disputed that the respondents had imported the goods from Chile or Indonesia origin, which is substantiated by various documents insofar as invoice, assay certificate and manufacture etc. There is no material available that the provisional assessment under Section 18 of the said Act was resorted for want of Country of Origin certificate. The commissioner (Appeals) had categorically observed that the Country of Origin certificate has been produced at the time of provisional assessment and therefore it was not mentioned as a required document in respect of finalization of the provisional assessment. These facts were not disputed by the Revenue in the grounds of appeals. On a query from the Bench as to how the refund has arisen in some cases, the learned counsel clarified that the refunds arose in cases of excess payment made on account of higher quantity and higher value, which has no relation to the dispute before us.
12. In view of the above discussion, we do not find any substance in the appeals filed by the Revenue. Accordingly, we uphold the impugned order and all the appeals filed by the Revenue are rejected. Stay applications are disposed of.
(Dictated and pronounced in open court)
(R. PERIASAMI) (P.K. DAS)
Technical Member Judicial Member
Rex
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