Symphony International Vs C.C.-Mundra (CESTAT Ahmedabad)
In a ruling that underscores the importance of specific evidence in customs disputes, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Ahmedabad has set aside a customs duty demand of Rs. 6.44 lakh, along with associated interest and penalties, imposed on Symphony International for its import of Natural Cocoa Powder from Malaysia. The Tribunal, in its order pronounced on January 23, 2024, found that the customs department had based its case on assumptions and unverified information from past investigations involving other parties, rather than conducting a specific inquiry into Symphony International’s imports.
The appellant, Symphony International, had imported Natural Cocoa Powder (CTH – 18050000) in February 2018 and claimed concessional customs duty under notifications related to the ASEAN-India Free Trade Agreement (AIFTA). This agreement grants preferential rates for goods originating from Malaysia, provided they meet specific Rules of Origin (ROO) criteria, including a minimum Regional Value Content (RVC) of 35% of the Free On Board (FOB) value.
Subsequently, a Show Cause Notice was issued to Symphony International in May 2019, challenging the Certificates of Origin (COOs) presented by the company. The department alleged that the goods were derived from Cocoa Beans of Ghana origin and that the RVC was only approximately 13-17%, falling short of the required 35%. This allegation was primarily based on a purported inquiry conducted by the Directorate of Revenue Intelligence (DRI) in 2014, involving a different importer (M/s Morde Foods Pvt. Ltd.) and suspicion regarding cocoa powder sourced from the same Malaysian supplier, M/s Guan Chong Cocoa. In that older case, the Malaysian authorities (Ministry of International Trade and Industry – MITI) had confirmed the 35% RVC but withheld cost structures citing data privacy. The department argued that this denial of costing structure was not in conformity with AIFTA rules.
