2026-VIL-1499-CESTAT-AHM-CU
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CUSTOMS CESTAT Cases

Customs - Fraudulent claim of Certificate of Origin and denial of duty exemption benefit - Origin of goods imported under preferential trade agreement - Appellant imported Cold Rolled Stainless Steel Coils and claimed exemption under Notification 46/2011-CUS based on Certificate of Origin purportedly issued by Malaysian supplier - Department found through inquiry with Malaysian Ministry that supplier company was not registered in their ePCO system and had never received CoO application from supplier - Whether exemption benefit can be denied based on non-verification of CoO from issuing authority and retracted statements - HELD - While the statutory framework under AIFTA and Customs Tariff Rules requires retroactive checks to be done in time bound manner with reasons, the Department must conduct specific verification of CoO with issuing authority from exporting country rather than making assumptions based on general emails regarding other certificates or general statements about supplier's business activities. The testimonial evidence comprising retracted statements of proprietor made two years after initial statement requires proper examination-in-chief and cross-examination as mandated by statute and established judicial precedent before being relied upon. Where statements are recorded during investigation but provided only with Show Cause Notice then retraction within reasonable time of communication of such statements is valid. The requisite verification of specific CoO for goods imported by appellant has not been conducted or completed as per prescribed procedures - Documentary evidence of CoO issued by Government Authority must be preferred over presumptions and assumptions regarding capacity or business activities of exporting country or supplier. When documentary evidence in form of valid CoO certified by Government authorities is produced importer is entitled to preferential treatment and burden cannot be placed on importer to prove circumstances under which certificate was issued - The Department failed to follow prescribed statutory verification procedure before making allegations of fraudulent CoO and consequent denial of exemption benefit. General email pertaining to check of other 87 CoOs cannot be generalized to assume that appellant's three specific CoOs are also non-authentic. Without statutory verification specific to appellant's certificates benefit of Notification cannot be denied – The impugned order is set aside and the appeal is allowed
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