2026-VIL-1389-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs – SAFTA Certificate of Origin – Preferential duty claim – Goods obtained from ship breaking in Bangladesh imported with valid Certificate of Origin issued by designated authority of exporting country under SAFTA rules – Appellant filed Bill of Entry claiming preferential duty under Notification 99/2011 but after prolonged detention of more than one month with mounting demurrage charges, under coercive circumstances, wrote letter dated 04.07.2022 foregoing SAFTA benefit and willing to pay full duty – Customs authorities disallowed SAFTA benefit without following prescribed procedure and imposed differential duty, ordered confiscation with redemption fine and penalty – Whether the letter foregoing SAFTA benefit was voluntary and whether Appellant lost right to file appeal and whether goods were eligible for SAFTA benefit – HELD – The letter was not written voluntarily but was written under forced circumstances of prolonged detention and mounting demurrage which forced the Appellant to write the letter so that goods urgently required for manufacturing could be cleared and demurrage reduced. The circumstances of prolonged detention cannot be envisaged as the circumstances mentioned under Section 28DA(4) of the Customs Act, 1962 for relinquishment of claim and the Appellant has not lost their right to file appeal against the assessment order - The goods imported from Bangladesh were accompanied with Certificate of Origin issued by the designated authority in Bangladesh in terms of Article 1 of Annexure-B of Determination of Origin of Goods under SAFTA. The SAFTA certificate is complete and in accordance with format prescribed by Rules of Origin with no alteration and was produced within validity period. The Customs (Administration of Rules of Origin under Trade Agreement) Rules, 2020 incorporate Rules of Origin notified for trade agreements and SAFTA is a Trade Agreement for which Rules of Origin as notified under Notification No.75/2006-Customs (NT) dated 30.06.2006 have duly been complied with by production of SAFTA certificate issued by Competent Authority - No such step as prescribed under Determination of Origin of Goods under SAFTA agreement has been followed by investigation before denying benefit of duty exemption - There was no misdeclaration or fraud established against Appellant warranting confiscation under Section 111(o) and 111(m) of Customs Act, 1962. The differential duty, confiscation, redemption fine and penalty imposed are not sustainable – The appeal is allowed. The differential duty of assessed amount with interest is set aside. The confiscation order is set aside. The redemption fine is set aside. The penalty under Section 112(a)(ii) is set aside.
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