Indian Authorities Cannot Assail Authenticated Thailand Certificate Of Origin: Bombay High Court

The Bombay High Court has dismissed the Customs Department's appeal against a jewellery importer, holding that once the designated authority in Thailand has authenticated a Certificate of Origin (CoO), Indian Customs authorities cannot reopen its authenticity or deny the benefit of concessional duty under the Indo–Thailand Free Trade Agreement (FTA).

The court also held that statements recorded under Section 108 of the Customs Act, 1962, cannot override an authenticated Certificate of Origin.

A division bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla upheld the Customs, Excise and Service Tax Appellate Tribunal's (CESTAT) order.

It ruled that the revenue's appeal did not raise any substantial question of law. The Revenue had contended that the importer failed to satisfy the value addition requirement under the Interim Rules of Origin and had allegedly admitted the same in statements recorded under Section 108 of the Customs Act.

The bench observed, "Once the Designated Authority in Thailand has issued the Certificate of Origin, and the same has been in fact authenticated by the said Authority, the Indian Authorities cannot embark upon an investigation to assail the said Certificate of Origin. Once this is the case, any purported statement made by the importer under Section 108 of the Customs Act, 1962, can have no bearing on the authenticity of the Certificate of Origin."

The respondent, Neelam Jewels, had imported goods from Thailand by producing Certificates of Origin issued by the competent Thai authority and obtained concessional customs duty under the Indo–Thailand FTA.

Subsequently, the Directorate of Revenue Intelligence (DRI) suspected the validity of the certificates and initiated an investigation.

The department alleged that the prescribed local value addition requirement had not been fulfilled. It also relied on statements of the importer's representatives recorded under Section 108 of the Customs Act to contend that the goods were not eligible for preferential treatment.

The CESTAT rejected the Department's case after examining the Interim Rules of Origin. It found that there was no allegation of non-compliance with the relevant certification requirements.

The tribunal further held that the authenticity of the Certificates of Origin, once confirmed by the Thai authorities, could not be questioned by Indian Customs.

Agreeing with the tribunal, the High Court observed that once the competent authority in Thailand had confirmed that the Certificates of Origin were genuine and had been issued by the Department of Foreign Trade, Thailand, Indian Customs authorities could not go behind those certificates to deny concessional duty.

The court held that allowing Indian authorities to question such authenticated certificates would defeat the sanctity of the Interim Rules of Origin under the Indo–Thailand Free Trade Agreement. Consequently, any statement allegedly made by the importer under Section 108 of the Customs Act would have no bearing on the authenticity of the Certificate of Origin.

Finding no infirmity in the tribunal's conclusions, the court held that the Revenue's appeal did not raise any substantial question of law. It accordingly dismissed the appeal.

For Appellants: Advocates Satyaprakash Sharma with Sangeeta Yadav, Umesh Gupta and Vaishali Malekar.

For Respondent: Advocate Kiran Doiphode instructed by V. M. Doiphode.