Ausil Corporation Pvt Ltd Vs Union Of India & Ors. (Delhi High Court)
Conclusion: Proper officer under Customs Act could detain the goods or stall the process of importation, without forming a requisite opinion in support of a suspicion that he had regarding the issue of Country-Of-Origin (COO) certificate or the origin of the imported articles.
Held: Assessee-company had imported platinum alloy sheets classifiable under Customs Tariff Heading 7110 1900, under 4 Bill of Entries generated between 13 to 16 July 2024. The said import was sought to be effected on payment of a preferential rate of duty of 5%. A similar importation was made by assessee under 10 Bill of Entries submitted between 14 to 19 July 2024 for identical consignments of platinum alloy sheets. Respondents however held that consequent to the conclusion of the investigation, the competent authority had been advised to assess the Bill of Entries subject to the submission of a PD Bond of 100% of the assessable value along with a Bank Guarantee of differential duty pending verification of the COO certificate regarding origin and value addition as also verification of the percentage of platinum in the imported platinum alloy sheets. Assessee were therefore aggrieved by the detention of a consignment of goods comprising of platinum alloy sheets and the release thereof being made subject to the submission of a PD Bond equivalent to 100% of the assessable value along with a Bank Guarantee of differential duty @ 10.712% thereof pending verification of the Country-Of-Origin (COO) certificate accompanying those goods. Assessee contended that the action of the respondents was wholly arbitrary since no reasons had been assigned in the impugned orders which might be viewed as being even suggestive of the formation of a reasonable belief or opinion that the COO certificate or the imported articles were non-compliant with the statutory prescriptions which apply. Assessee referred to the detailed statutory mechanism prescribed by Section 28DA of the Customs Act, 1962 read along with CEPA Rules, 2022 together with the CAROTAR and which compendiously create a minimum threshold which might warrant the detention of goods covered by a Trade Agreement pending verification or enquiry. It was held that platinum alloy sheets were goods which were otherwise entitled to preferential tariff treatment under the CEPA Rules. The detention of the goods was not prefaced by the recording of any reasons by the proper officer of circumstances based on which it came to the form the opinion or had reason to believe that the goods sought to be imported did not conform to the COO criteria, when the proper officer had not doubted the genuineness of the COO certificate. Formation of the requisite opinion could not be left to surmise and conjecture, and the order which the proper officer chosen to frame must itself be reflective of the reasons which weighed upon that authority to block or pause the importation. The Bench found that the respondents had simply asserted that although the SIB had concluded its investigation, they had been advised to assess the Bill of Entry under a PD Bond and the furnishing of a Bank Guarantee. Such orders woefully failed to record any reason which may be reflective of consideration having been accorded to the various factors which would be relevant to an exercise of verification being initiated, for a COO certificate being doubted or the action being necessitated under any provision of the Act, CEPA Rules or CAROTAR, added the Bench. The Bench also pointed that the COO certificate when found to have been issued by the competent authority of the reciprocal State, could not be lightly ignored or questioned except on the basis of well-substantiated grounds resting on valid, credible and reasonable belief which constrained the authority to initiate a verification exercise. Insofar as the condition of requiring a Bank Guarantee or differential duty was concerned, the respondents appeared to have mechanically proceeded upon a purported understanding of the Guidelines regarding Provisional Assessment under section 18 of the Customs Act, 1962, which had been framed by the CBEC, added the Bench. Hence, the High Court allowed assessee’s petitions and directed the respondents to reconsider the release of the imported articles with due expedition, while bearing in mind the onerous conditions explained in case of Bullion and Jewellers Association (Regd.) vs. Union of India [2016 SCC OnLine Del 2437].
