The Madras High Court has directed the customs department to release the areca nuts imported from Sri Lanka provisionally which were seized under fraud suspicions.
The Petition, Vishwa Enterprise has claimed that they have imported 540 bags of Areca nuts from Sri Lanka based exporter named D.L.K. Spice Export, which was subsequently seized by the Customs department.
It was asserted that according to the provisions outlined in the Indo-Sri Lanka Free Trade Agreement ( ISFTA ), it is stipulated that areca nuts may be imported duty-free, contingent upon compliance with the Customs [ Administration of Goods of Origin under Trade Agreements ] Rules, 2020 (CAROTA Rules). Despite the submission of a certificate of origin and verification affirming its authenticity, the goods were not released, prompting the filing of the current writ petition.
The petitioner’s legal counsel contended that the goods originated from a supplier named D.L.K. Spice Export, located in Sri Lanka. Regarding these goods, it is asserted that the certificate of origin was issued on 22.06.2023. Upon the request for verification, the Department of Commerce, Sri Lanka, issued a verification certificate on 31.10.2023. The counsel highlighted that this certificate was issued following a series of correspondences involving the High Commission of India in Sri Lanka.
It was further submitted that all necessary documentation and verifications had been completed satisfactorily, entitling the petitioner to the release of goods without the need for a bank guarantee.
Mr. Sundareswaran, as senior standing counsel, submitted a communication from D.L.K. Spice Export dated 14.09.2023, alleging fraudulent claims by Indian importers.
Additionally, Mr. Sundareswaran noted that the certificate of origin lacks the proprietor’s signature, casting doubt on its validity. Referring to Rule 6(2) of the CAROTA Rules, he argued that the proper officer’s request for additional information is justified based on the letter from D.L.K. Spice Export. Consequently, Mr. Sundareswaran opposed the release of goods.
Despite the verification, the respondents argued that additional information is necessary due to a communication from D.L.K. Spice Export dated 14.09.2023. This communication lists certain importers but does not mention the petitioner, despite their bill of entry preceding the communication. However, the request for further information has not been officially recorded. It is noted that under sub-rule 2 of Rule 6, the proper officer is allowed to request additional information following verification.
Considering the factors that a certificate of origin was issued by the relevant Sri Lankan authority, duly verified by the Department of Commerce, Government of Sri Lanka; the absence of petitioner’s mention in the communication from D.L.K. Spice Export; and the lack of record for the request of additional information, the court deemed it suitable to order the provisional release of goods. However, this release is subject to limited safeguards to safeguard revenue interests given the prevailing circumstances.
Accordingly, the bench of Justice Senthilkumar Ramamoorthy disposed of the writ petition with the following directions:
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