Areca Nuts Have Limited Shelf-Life, Risk Of Contamination: Madras High Court Directs Verification Of Certificate Of Origin

The Madras High Court has directed the verification of certificate of origin within 30 days and in case of failure of verification within time release the seized areca nut is subject to providing a bond for 100% of the value of goods but without insisting on a bank guarantee.

The bench of Justice Senthilkumar Ramamoorthy has observed that areca nuts have a limited shelf-life and the risk of contamination and deterioration of goods increases over time.

The petitioner/assessee is an importer of areca nuts. According to the petitioner, areca nuts were imported from Sri Lanka under the Bill of Entry. In accordance with the free trade agreement between India and Sri Lanka, it is stated that these goods are exempt from customs duty. For purposes of availing of exemption, the petitioner stated that a certificate of origin is required to be produced and that the petitioner produced a certificate of origin from the Department of Commerce, Sri Lanka.

On the alleged ground that the certificate may not be genuine, the petitioner stated that onerous conditions were imposed when the goods were provisionally assessed.

The assessee contended that certificate of origin and pointed out that the said certificate of origin contains a QR Code. Consequently, when a request was made for the issuance of a verification certificate, the High Commission of Sri Lanka refused to do so by pointing out that the QR Code can be verified in real-time. The verification is not supposed to be undertaken on a mechanical basis. The circular dated 17.08.2021 of the Central Board of Indirect Tax and Customs specifies that it is not necessary to verify the origin of goods imported from the same manufacturer/producer unless the subsequent consignment was modified with regard to manufacturing or other origin-related conditions.

The assessee urged that it may be permitted to clear the goods subject to the provision of a bond but without insisting on a bank guarantee.

The department contended that the Directorate of Revenue Intelligence (DRI) had noticed that certificates of origin in relation to imports from Sri Lanka were being fabricated. Consequently, it was decided that certificates of origin would be subject to scrutiny before the relevant goods were cleared for home consumption.

The court noted that more than six months have lapsed since the goods were brought into India. There is a reference to the DRI having noticed the manipulation of certificates of origin by unscrupulous importers. However, there is nothing to indicate that the petitioner indulged in manipulation of the certificate of origin relating to the present Bill of Entry or any other bill of entry.

The court directed the department to conclude the verification within a maximum period of thirty days from the date of receipt of a copy of this order. If the certificate is found to be genuine upon verification, the goods shall be released without insisting on payment of duty. On the other hand, if the certificate is found to be not genuine, it is open to the respondents to take further action in accordance with the law. If the verification is not completed within thirty days, the petitioner would be entitled to provisional release of the goods by providing a bond for 100% of the value of goods but without insisting on a bank guarantee.

Counsel For Petitioner: Mukul Singla

Counsel For Respondent: R.Hemalatha

Case Title: M/s.Radha Industries Versus Commissioner of Customs

Citation: 2024 LiveLaw (Mad) 8

Case No.: W.P.No.30338 of 2023

Click Here To Read The Order