Case Law Details
Softel Overseas Private Limited Vs Commissioner of Customs (Port) (CESTAT Kolkata)
CESTAT Kolkata rules on Softel Overseas vs. Customs case, emphasizing substantive benefits over procedural lapses in customs duty matters.
In a recent case, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Kolkata delivered a significant order in the matter of Softel Overseas Private Limited versus the Commissioner of Customs (Port). The case revolved around the appellant seeking the benefit of Notification No.12/2012-CUS dated 17.03.2012 (Sl.No.237) but encountering a procedural lapse that led to an unintended excess payment of duty. The tribunal’s ruling sheds light on the importance of substantive benefits over procedural lapses in customs duty matters.
Background of the Case
Softel Overseas Private Limited, the appellant, filed five Bills of Entry seeking the benefit of a specific customs notification. The error occurred when they failed to claim the benefit of Notification No.46/2011-CUS dated 01.06.2011 (Sl.No.440), which would have entitled them to a lower duty rate of 5%, as opposed to the 7.5% duty paid at the time of clearance. The mistake was identified after the goods had been cleared, leading to the realization that the imported goods were eligible for the ASEAN India Free Trade Preferential Tariff rate of duty.
Proceedings Before the Commissioner (Appeals)
The appellant approached the Commissioner (Appeals) seeking a rectification of the procedural lapse. However, the Commissioner rejected the appeal, citing discrepancies in the certificate of origin issued by the Thailand Government. According to the Commissioner, the certificate did not fulfill the conditions stipulated in Notification No.46/2011-CUS, and as a result, the appellant was deemed ineligible for the lower duty rate.
CESTAT Kolkata’s Analysis and Decision
Upon reviewing the case records, CESTAT Kolkata found itself in disagreement with the Commissioner’s decision. The primary objection raised by the Commissioner was the absence of specific invoice numbers in the certificate of origin. However, the tribunal pointed out that the appropriate invoice number was duly indicated in the certificate. The appellant argued that, due to the original consignment being split into five smaller imports, the common invoice number had to be subdivided into sets labeled A, B, C, D, and E.
CESTAT Kolkata supported the appellant’s argument, emphasizing that procedural lapses should not hinder substantive benefits, especially when no prejudice is caused to the contents and intentions of the documents. The tribunal cited legal precedents, such as the case of Food Corporation of India vs. Collector of Customs, to underline the principle that substantive benefits cannot be denied due to procedural errors.
Additionally, CESTAT Kolkata highlighted that the procedural omission did not violate any provisions of the Customs Tariff (Determination of Origin of Goods) Rules 2009. The tribunal clarified that a clerical error, if any, should not lead to the rejection of the entire certificate of origin.
Conclusion
In conclusion, CESTAT Kolkata set aside the Commissioner (Appeals) order, emphasizing that it lacked merit. The tribunal ruled in favor of the appellant, stressing that substantive benefits should prevail over procedural formalities. The decision serves as a reminder that, in customs matters, a clear and unambiguous interpretation of the law is paramount, and procedural lapses should not unjustly impede the grant of substantive benefits to the concerned parties.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant M/s. Softel Overseas Private Limited have filed the impugned appeal assailing the Order-in-Appeal No. 259/Cus (Apprg)/Kol(P)/2013 dated 26/27.11.2013 passed by the Ld. Commissioner (Appeals).
2. Briefly stated the facts of the case are that the appellant filed five Bills of Entry seeking benefit of Notification No.12/2012-CUS dated 17.03.2012 (Sl.No.237), as amended vide Notification No.25/2013-CUS dated 08.05.2013 and paid duty @ 7.5% at the time of clearance of the said goods. It however subsequently came to the knowledge of the importer that by mistake they had not sought the benefit of Notification No.46/2011-CUS dated 01.06.2011 (Sl.No.440) as the imported goods were liable for ASEAN India Free Trade Preferential Tariff rate of duty and duty accordingly was leviable on the imported goods @ 5%, thus having paid duty @ 2.5% in excess.
3. In appeal proceeding before the Ld. Commissioner (Appeals), the request of the appellants was rejected by the Ld. Commissioner (Appeals) inter alia stating as under:-
“5. I find from the certificate IAI2013-0008807 dated 3.5.2013 issued by Thailand Government that goods were Thailand made and country of origin was Thailand but invoices were issued by UNIPLUS INTERNATIONAL EAST, Sharjah, UAE and goods were shipped/loaded from Bangkik, Thailand. The certificate issued by Thailand Government has no particulars about the invoices having marks ABCED on 5 invoices in addition to invoice number 1132103714 and does not have any tick marks showing that goods were invoiced by third country. The original copy of said certificate of origin was perused during personal hearing and on the overleaf (reverse) conditions NO.7 were stipulated that third country invoice would be ticked. The Appellant submitted with appeal memorandum only front page photocopy of said certificate. As per Notification No.46/2011-dated 01.06.2011 laid down a condition that when goods are imported in republic of India from country listed in appendix I, the importer shall prove to eb satisfaction of Deputy/Asst Commissioner of Customs that goods are actually origin of country as mentioned in Appendix I but the said certificate issued by Thailand Government does not fulfill all conditions as prescribed by Thailand Government therefore appellant is not entitled to avail the benefit of 46/2011 as amended by notification no. 64/2012.”
4. Heard both sides and perused the case records.
5. The primary objection taken by the Ld. Commissioner (Appeals) while rejecting the appeal of the appellant was that the certificate issued by the Thailand Government did not contain the five invoice numbers having marked A,B,C,D,E to invoice No.1132103714 in respect of the goods under importation. Apart from this it was also pointed out by the Ld. Commissioner that the appropriate column in the said certificate of origin issued by the Thailand Government was not ticked and therefore he did not permit the grant of exemption Notification No.46/2011-dated 01.06.2011.
6. We are not in agreement with the view of the Ld. Commissioner (Appeals). It may be pointed out that the appropriate invoice number referred to (supra) is duly indicated in the said certificate at Sl.No.8. The said invoice is scanned below to establish the fact of indication of the invoice number with the import invoice, but for sub-division into A, B, C, D and E.
7. The appellants have submitted that as the original consignment was split up into five smaller imports, therefore, common invoice number (supra) had to be split up into five sets as A, B, C, D and E. We find this argument of the appellant to carry substantive force and be meaningful. Particularly when collectively the quantity of the five import invoice (72 MTs each) total up to the impugned quantity (360 MTs) and all other particulars of the import invoices are in sync with the details furnished in the impugned certificate. It is settled law that procedural lapses, if any, cannot come in the way of disallowing a substantive benefit to the party, as long as there was no prejudice caused to the contents and the intentions of the documents (Food Corporation of India vs. Collector of Customs1). As long as the language of the Notification is clear and unambiguous, it is not for the courts to go behind its prescription. Further, in a taxing statute there is no room for any intendment and regard has to be given to the plain language and clear meaning of the words. In accordance with the provisions of Customs Tariff (Determination of Origin of Goods) Rules 2009 under the Preferential Trade Agreement between the Governments of member states of the Association of South East Asian Nations (ASEAN) and the (Republic of India), we note, that the appropriate authority has issued the certificate upended with the case records and referred to by the Ld. Commissioner (Appeals). A clerical error, if at best any, would not merit rejection of the said original certificate in its entirety and thereof deprive the benefit thereof to the person availing the same. We note that the omission as pointed out does not violate any of the provisions of the Rules referred to above which could entail denial of the exemption. It is also settled law that where a more beneficial exemption is available to the assessee, it cannot be precluded from seeking duty relief thereto (refer‑ Commissioner of Customs, Chennai vs. Suvarna Florex2). Moreover, procedural formality, if any cannot impede the grant of a substantive benefit as held by the Tribunal in the case of India Photographic Co. Ltd. vs. Collector of Customs, Bombay3 and Shree Krishna Polyurethane India Pvt. Ltd. vs. Commissioner4.
8. For the reasons foregoing, we find that the Ld. Commissioner (Appeals) order is bereft of any merit and is liable to be set aside. We, therefore, set aside the impugned order and allow the appeal filed by the appellant with consequential relief, as per law.
(Operative part of the order was pronounced in the open Court.)
Notes:
1. 1992 (60) E.L.T. 416 (Tribunal).
2. 2003 (154) ELT 622 (Tri-Chennai).
3. 1994 (71) ELT 524 (Tribunal).
4. 1998 (102) ELT 162 (Tribunal).
