2026-VIL-1415-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - SAFTA exemption - Mismatch in tariff classification - Denial of Country of Origin benefit - Appellant imported textile items from Bangladesh and claimed exemption under Notification No. 99/2011 (SAFTA) on the basis of Country of Origin certificate issued by the exporting country. The adjudicating authority found classification mismatch between the codes mentioned in the Certificate of Origin and the codes redetermined by customs authorities and denied the benefit of exemption. Goods were also proposed for confiscation - Whether mismatch in tariff classification at 6-digit level between Country of Origin certificate and customs authorities' determination invalidates the Country of Origin certificate and disentitles the appellant from exemption benefit - HELD - There was no misdeclaration found on the description of the goods. Even if there is a mismatch in tariff classification, this does not disentitle the appellant from the benefit available on the basis of Country of Origin as none of the conditions under Rule 2 of CAROTAR 2020 for denying COO have been satisfied. The redetermined tariff headings remain well covered within the benefit of the exemption notification - Article 14 of SAFTA Rules states that minor discrepancies between statement made in certificate of origin and documents shall not invalidate the certificate. Under Section 28DA and CAROTAR rules, no provision exists to reject Country of Origin certificate merely on basis of classification mismatch when Country of Origin of goods is not in dispute. Appellant is entitled to benefit of exemption as claimed - Differential duty, interest, penalty, confiscation and redemption fine all set aside – The appeal is allowed - Customs - Valuation - Branded goods - Redetermination of value on basis of NIDB data - Appellant declared value of textile items on basis of supplier's invoice. Adjudicating authority redetermined the value citing NIDB data for similar branded goods without investigating whether goods were counterfeits - Whether valuation can be enhanced based on NIDB data for branded goods without investigating counterfeiting and without following valuation procedure - HELD - Adjudicating authority found that no brands on the goods were registered with Customs and no infringement of Intellectual Property Rights arose. However, value was enhanced by adopting price of branded goods without basis. No investigation was carried out to establish whether goods were counterfeits. Simply naming a brand does not make goods branded or counterfeit. Value of textile items depends on nature and quality of fabric which is vital to arrive at price. Value enhancement was done arbitrarily without following procedure prescribed under Valuation Rules. Declared transaction value cannot be rejected and redetermined value is not sustainable - Redetermined value set aside and transaction value declared by appellant is upheld.
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