The Customs, Excise & Service Tax Appellate Tribunal, Chennai ( CESTAT ) granted relief to Hyundai, holding that the Customs Department may not deny concessional duty available to an importer once the Country-of-Origin Certificate ( COO ) duly contains and covers the Imported Goods.
The decision was rendered by CESTAT while hearing multiple Customs Appeals filed by Hyundai Motors India Ltd. (Hyundai), Kanchipuram, a prominent manufacturer of passenger motor cars, against the Commissioner of Customs and vice versa. Hyundai imports various parts and accessories for use in their passenger motor cars and is involved in a number of taxation processes to facilitate their business.
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The Directorate of Revenue Intelligence (DRI), on the basis of intelligence received by them, alleged that Hyundai had misclassified various goods imported by them to illicitly avail Basic Customs Duty (BCD) exemption in light of exemption Notification No. 152/2009-Customs dated 31.12.2009. The Notification provides Exemption of Customs duty on certain goods when imported into India from the Republic of Korea.
Hyundai averred that the disputed PIO AVN Audio systems were imported from Vietnam, availing exemption benefit of Nil Customs Duty in terms of Customs Notification No. 46/2011 dated 01.06.2011. The Appellant claimed that the PIO AVN Audio were classifiable under CTH 8526 9190 and eligible for the benefit of concessional rate of BCD @ Nil in terms of Serial No.1389 (I) of Notification No. 46/2011 Customs dated 01/06/2011, instead of claimed Serial No.1390 (I).
The Appellant further referenced the COO in terms of the Agreement on Trade in Goods Under the Framework Agreement of the ‘Comprehensive Economic Co-operation between the Republic of India and the Association of Southeast Nations (ASEAN)’, 2009. A Country-of-Origin Certificate may only be issued after verification of the three substantive conditions, i.e., minimum regional value addition, substantial manufacturing process and change of nomenclature of the product and change of sub tariff heading of the resultant product among other procedural criteria.
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The two-member Bench of CESTAT, Chennai comprising P. Dinesha, Judicial Member and M. Ajit Kumar, Technical Member averred that once the Country of Origin (COO) Certificate covers the imported goods, it shall satisfy the requirement of the exemption notification; if the Certificate is not challenged and modified as per the procedure established by the Rules of 2009, the benefit of concessional duty cannot be denied to the Appellant.
Additionally, the Bench noted that the Customs had not adduced any grounds indicating that the COO may have been fraudulently obtained. In consideration of the findings, The Customs, Excise & Service Tax Appellate Tribunal, Chennai held that the disputed goods are eligible for BCD concession at Nil rate, as was claimed at the time of import, prior to reclassification.
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