The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has clarified that treating every procedural lapse alike ignores the purpose of the requirement. The doctrine of substantial compliance prevents undue hardship where obligations are essentially met and any deficiency is only minor and non-essential.
The CESTAT therefore held that once the imported goods have satisfied the requirements of law, they deserve to be granted the benefit of exemption from Basic Customs Duty under Notification No. 046/2011-Cus dated June 01, 2011. Accordingly, the Tribunal allowed the benefit of exemption from Basic Customs Duty on ‘Aluminium Scrap Tread’.
The Division Bench comprising Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) found that that the dispute relates to an alleged procedural defect, relating to non-identification of imported goods in the absence of the country of origin not being mentioned on the goods.
The Bench observed that the Bill of Entry No. 6072913 dated July 09, 2014, examined as a representative case, describes the goods as “ALUMINUM EXTRUSION SCRAP 6063 AS PER ISRI TREAD,” while the Certificate of Origin describes them as “1X40’ HQ Container, 25.782 MT, ALUMINUM EXTRUSION SCRAP 6063 TREAD”, and certifies the exporter’s declaration ‘on the basis of control carried out’.
As per the guidelines of the Institute of Scrap Recycling Industries, Inc., the Bench pointed out that the “TREAD” denotes clean, uncoated aluminium castings, forgings, and extrusions of a single specified alloy, free from contaminants. This description was hence sufficiently detailed to enable identification of the goods by Customs officers.
In these circumstances, the Bench concluded that the absence of country-of-origin markings on the goods could not have impeded their identification, particularly when all accompanying documents were verified by the Customs Officer and no discrepancies were found. There was also no evidence of tampering with the container or any other blameworthy act reported to have been done by the importer.
Briefly, the appellant filed three bills of entry for clearance of imported ‘Aluminium Scrap Tread’ from M/s. Esun International Pvt Ltd., Singapore, classified under CTH 7602 00 10, and claimed exemption from Basic Customs Duty under Notification No. 046/2011-Cus dated 01.06.2011 (Sl. No. 992(I)) based on the Country of Origin under the ASEAN–India Free Trade Agreement.
The Department ordered first check examination to verify the country of origin. Upon examination, the dock officers reported that while the FTA certificate issued by Singapore and other documents were verified, the goods did not bear any marks or numbers indicating the Country of Origin (COO). On this ground, the adjudicating authority denied the benefit of the notification and reassessed the bills of entry at the merit rate of duty. The goods were cleared on payment of duty under protest.
Appearances:
Chartered Accountant B. Aditya Sundar, for the Appellant/ Taxpayer
AR, Vineeth Goel, for the Respondent/ Revenue
