ORDER
T.K. Jayaraman, Member (T)
1. This appeal has been filed against the Order-in-Original No. 08/2006 dated 17/20.03.2006 passed by the Commissioner of Customs, Cochin.
2. The appellants imported Cloves from Pakistan under two Bills of Entry claiming concessional assessment under SAARC Preferential Trading Agreement (SAPTA) Notification No. 105/99. The country of Origin, as per the Certificate of Origin, is Pakistan. Since Pakistan does not produce Cloves, investigations were carried out. The Commissioner referred the matter to the Spices Board for confirmation as to whether Pakistan is known to have Clove production and export. The Spices Board referred the matter to the Indian High Commission in Islamabad. After local enquiries, the High Commission found that Cloves are not grown in Pakistan. The first consignment was cleared provisionally after the execution of a Bank Guarantee for 10% differential duty. As regards the second consignment, in view of the order of the Hon’ble High court of Kerala, the same was released on payment of Customs duty at 7% and also execution of Bank Guarantee for the rest of the amount. As the value declared by the importer was low, the value was enhanced on the basis of the contemporaneous import price and the goods were released provisionally. As the Kerala High Court had given a deadline for deciding the issue, a Show Cause Notice was issued to the appellants. The Commissioner, in the impugned order, held that the appellants are not entitled for the benefit of the concessional duty under Notification No. 105/99. Further, in respect of the consignment imported on 19.05.2004, the Transaction Value was rejected in terms of Rule 10A of the Customs Valuation Rules, 1988 and the value of Rs. 117.75 per kg as ascertained from NIDB, being the contemporaneous import price was taken for assessment purpose. The appellants are highly aggrieved over the impugned order. Hence, they have come before this Tribunal for relief.
3. Shri S. Murugappan, the learned Advocate, appeared on behalf of the appellants and Shri Anil Kumar, the learned JDR, for the Revenue.
4. Heard both sides.
5. The learned Advocate urged the following points:
(i) The best evidence regarding the country of Origin for the Cloves imported is the Government of Pakistan itself. For the reference made to the External Affairs Ministry, Pakistan Government, no reply has been received by the Respondent. Merely for the reason that Pakistan Government has not responded does not mean that a valid Certificate issued by the Pakistan Government in terms of the relevant rules of origin under the Free Trade Agreement can be discarded.
(ii) The reliance placed on the Ministry of Commerce and Industry, New Delhi’s dated 17.05.2005 is misplaced. There is a statement in para 2 of the above letter to the effect that neither Pakistan nor Bangladesh is a grower of Cloves. This is a bland statement not supported by any evidence.
(iii) As per SAPTA Notification 105/99, a proper Certificate as stipulated in the Notification has to be produced by the importers. If at all the Certificate is to be discarded, the department has to conclusively prove beyond doubt that this Certificate is either a fabricated one or faked one and not genuine. In the absence of anything concrete to show that the Certificate produced is not genuine, it is not open to the respondent to discard the Certificate.
(iv) With regard to the enhancement of value, there is no basis whatsoever for the respondent to adopt the value of Indonesian cloves. There is no evidence to suggest that the goods are from Indonesia. It is a wild presumption made by the respondent that the goods could have been imported from Indonesia by Pakistan and then shipped to India. In the absence of any evidence, whatsoever, to establish this presumption, the value applicable for Indonesian cloves cannot be adopted in the present case.
6. The learned JDR reiterated the Order-in-Original.
7. We have gone through the records of the case carefully. There are two issues to be decided in this appeal. They are as follows:
(i) Whether the impugned goods namely ‘Cloves’ imported by the appellant are entitled for the benefit of Notification 105/99.
(ii) Whether the value declared by they appellant should be rejected in terms of Rule 10A of the Customs Valuation Rules, 1988 and the value of contemporaneous import price as available in the NIDB, which is Rs. 117.75 per kg., should be taken up for the assessment.
7.1. The appellant is in possession of the Certificate of Origin in respect of the Cloves imported by them. As per their Certificate, the goods are of Pakistan origin. It is the contention of the appellants that as a valid Certificate of Origin has been produced and as the same has not been cancelled, they are entitled for the benefit of the said Notification. Normally, certificates of Origin issued by the authorities of a foreign country are accepted for purposes of concessional rate of duty in terms of Preferential Trading Arrangement. But, at certain times, Certificates are issued, which are contrary to facts. The simple issue here is whether the Certificate of Origin, certifying that the imported Cloves are from Pakistan, is to be accepted or not. It is a matter of general knowledge that Cloves, a kind of spice, are generally produced in Indonesia, Zanzibar and Madagascar and India, Certain agricultural products grow only in certain parts of the world due to various reasons. For example, Mangoes are produced mainly in tropical countries. If somebody claims that the mangoes brought by him are produced in Iceland or New Zealand, it would be very difficult to swallow it. In fact, the correspondence between the Ministry of Commerce & Industry and the Ministry of Finance, as reveled in the letter dated 17.05.2005 from the Additional Secretary (Commerce) to Secretary (Revenue) reveals that the SAPTA Agreement is misused in respect of Cloves. Para 2 of the said letter is reproduced below:
2. It may be mentioned that neither Pakistan nor Bangladesh is a grower of cloves and betel nuts and cloves sourced from Singapore and Indonesia are exported to Bangladesh and Pakistan and from there to India under the Certificate of Origin of Bangladesh and Pakistan respectively.
Therefore, if the Certificate produced by the appellant is accepted, then truth becomes casualty. The appellants have not produced any evidence to the effect that cloves are grown in Pakistan also. In these circumstances, we also hold that the concessional assessment under the said SAPTA Notification No. 105/99 cannot be given to the Cloves imported by the appellants.
7.2. As regards Valuation, the Commissioner has recorded that in respect of the first consignment, the appellants have agreed for adopting the value of Indonesian cloves as per NIDB data. Therefore, for the second consignment also, he has adopted the same value. Having accepted the enhanced value for one consignment on the above basis, the appellants cannot say that they would not accept the value for the second consignment. In these circumstances, we do not find any merit in this appeal. We uphold the impugned order and dismiss the appeal.
(Pronounced in open Court on)