The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Chennai has held that a minor procedural error in a Country of Origin (COO) certificate should not prevent the appellant from availing tariff benefits under the Association of Southeast Asian Nations (ASEAN)-India Free Trade Agreement (FTA). The bench applied the doctrine of substantial compliance, emphasising the need for justice over rigid procedural formalities.
The case arose from appeals filed by M/s. Devendran Coal International Pvt. Ltd. against an order of the Commissioner of Customs (Appeals), Chennai. The appellant had filed Bills of Entry for the clearance of goods declared as “steaming (non-coking) coal” in bulk, which was provisionally assessed at 5% basic customs duty. However, the company sought the benefit of a concessional tariff rate of 3% under Customs Notification No. 153/2009, amended by Notification No. 135/2010, based on the ASEAN-India FTA.
The dispute centred around the Country of Origin certificate, which was initially submitted without the stamp “issued retroactively” as required under the ASEAN-India FTA rules. Subsequently, an amended certificate with the stamp was submitted, but the customs authorities rejected it, citing that the correction amounted to an alteration that was not properly authenticated. The rejection of the certificate led to the denial of the concessional tariff benefit.
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The appellant, M/s. Devendran Coal International Pvt. Ltd., represented by Shri Ajay Kumar Gupta argued that the minor procedural error in the Country of Origin certificate should not invalidate the certificate. They asserted that the goods were of Indonesian origin and the correction did not affect the certificate’s authenticity.
The respondent revenue, Commissioner of Customs (Imports), represented by Smt. Anandalakshmi Ganeshram contended that the amendment to the Country of Origin certificate, adding “issued retroactively”, amounted to an alteration that violated ASEAN-India FTA rules. They argued that the correction lacked proper authentication and countersignature, casting doubt on the certificate’s authenticity, thus justifying the denial of concessional tariff benefits.
The CESTAT found that while the certificate had been amended after the date of shipment, there was no substantial issue with the validity of the goods’ origin, which was confirmed to be Indonesian.
The bench observed that there was no other evidence or indication suggesting that the certificate was fraudulent or incorrect, aside from the procedural error of the unapproved correction.
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The CESTAT referred to the doctrine of substantial compliance, which allows for minor procedural errors to be overlooked when they do not go to the essence of the matter. Citing precedents, including the Constitution Bench judgment of the Supreme Court in Sardar Amarjit Singh Kalra (Dead) by Lrs. v. Pramod Gupta (Smt), the bench emphasised that laws of procedure should serve justice, not hinder it.
“Doubt is not a substitute for proof,” the bench stated, pointing out that the customs authorities failed to provide concrete reasons to discredit the authenticity of the amended certificate. The correction, while not in strict accordance with the prescribed procedure, was a minor error that did not affect the overall validity of the certificate or the eligibility of the goods for preferential tariff treatment.
In light of the above reasoning, the two-member bench of the CESTAT comprising Shri P. Dinesha (Judicial Member) and Shri M. Ajit Kumar (Technical Member) overturned the decision of the lower authorities, ruling in favour of the appellant. The bench allowed the appeal, granting the 3% concessional tariff benefit and highlighting the need to prioritise substantial compliance with procedural requirements, rather than disqualifying genuine claims over technicalities.
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The decision stressed that procedural shortcomings do not result in unfair denial of entitled benefits, particularly in trade matters governed by international agreements such as the ASEAN-India FTA.
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