Case Title: M/s.Radha Industries Versus Commissioner of Customs
Case No.: W.P.No.30338 of 2023
Decided on: 02nd January, 2024
CORAM: THE HON’BLE MR. JUSTICE SENTHILKUMAR RAMAMOORTHY
Facts of the Case
As an importer of areca nuts, the petitioner claims that on June 24, 2023, the items were imported from Sri Lanka. The petitioner requests an exemption from customs duty on areca nuts, citing the free trade agreement between Sri Lanka and India. In order to receive this exemption, the petitioner had to present a certificate of origin from the Sri Lankan Department of Commerce. According to the petition, the petitioner was subjected to onerous circumstances during the provisional evaluation of the products due to the possibility that the certificate was not authentic. As a result, the writ petition was filed. The petitioner highlights that the certificate of origin includes a QR Code on it. Because the QR Code could be instantly validated, the Sri Lankan High Commission declined to provide a verification certificate.
The respondents assert that verification of certificates of origin for imports from Sri Lanka was detected by the Directorate of Revenue Intelligence (DRI), which prompted examination prior to goods clearance. Furthermore, an interim evaluation carried out in accordance with Section 18 of the Customs Act allowed for additional investigation in accordance with clause (c) of sub-section (1). The respondents draw attention to the petitioner’s compliance with Section 28DA, including sub-sections 4 and 5, which deal with verification and the release of goods. The acknowledged situation is that more than six months have passed since the items entered India, with the Bill of Entry having been issued on June 24, 2023.
Legal Provisions
Section 18 of the Customs Act, 1962 pertains to the provisional assessment of duty. It allows for further inquiry even when the importer has submitted all necessary documents. Sub-sections 4 and 5 of Section 28DA relate to the verification and release of goods. They also enable the imposition of security for the difference between the provisionally assessed duty and the preferential duty claimed by the importer.
Issues
Did the imposition of onerous conditions during provisional assessment, based on suspicions of fabricated certificates of origin, comply with the Sections 18 and 28DA of the Customs Act?
Courts analysis and decision
The High Court has issued an order requiring the origin certificate for areca nuts to be verified within a thirty-day period. The court stressed the need for a speedy resolution, acknowledging the short shelf-life of areca nuts and the increased danger of contamination and deterioration over time. The products had been in India for over six months, the court noted, and it was mentioned that the Directorate of Revenue Intelligence (DRI) was aware that some importers were manipulating their certificates. Crucially, the court discovered no proof that the petitioner had any hand in manipulating the in-question certificate of origin or any other bills of entry. With the court specifically excluding the need to demand on a bank guarantee for the provisional release, the petitioner must furnish a bond equal to 100% of the value of the items.
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Written by- Rupika Goundla
