Per P. Karthikeyan : M/s. New Bombay Exports imported 10 M.Ts of cloves declared to be of Srilankan origin and of value of Rs. 5,86,810/- under a Bill of Entry dated 02.06.98. Goods originating from SAARC countries are subject to a preferential rate of import duty. The goods under import, on test by the Senior Scientist of Spices Board, was found to be not of Srilankan origin. The markings on the gunny bags indicated the goods to be of Madagascar origin. Moreover, there were discrepancies in dates figuring on the packing list and the related invoice. There was a discrepancy in the container number. Therefore, after due process of law, the original authority confiscated the consignments under Section 111 of the Customs Act and offered an option to redeem the goods on payment of a fine of Rs. 50,000/-. He also imposed a penalty of Rs. 50,000/- on the importer M/s. New Bombay Exports under Section 112 of the Customs Act.

2. In the impugned order, the Commissioner (Appeals) set aside the order of the original authority. He found that the country of origin of the impugned goods had been decided by the original authority on the basis of the opinion of an expert and not on the basis of any scientifically standardized parameters. Standardization was not possible in respect of the produce as the same goods produced in different regions within the same country can possess different parameters. Therefore, the said test was not reliable. The expert had opined that the country of origin of the impugned goods to be Zanzibar whereas the department's case was that the same had originated from Madagascar. As regards the use of gunny bags bearing the marking 'Produce of Madagascar' the importer had explained that they had used double gunny bags. They had used second hand gunny bags bearing the marking 'Produce of Madagascar'. Their packing had displayed the label "Srilankan origin". As regards the discrepancies in the packing list compared to the invoice and the container number, the Commissioner (Appeals) agreed with the importer that these points had not been raised in the Show Cause Notice. He found that the National Chamber of Commerce of Srilanka had certified the goods to be of Srilankan origin. The investigating officers had committed a serious lapse in not checking with the agency entrusted with the responsibilities of issuing the country of origin certificate regarding it genuineness. The Commissioner (Appeals) found substance in the argument of the appellant that once the importer had furnished certificate of origin issued by the designated authority and its genuineness had not been disputed, the customs authorities should accept the same as valid and allow clearance accordingly. A finding to the contrary relying on circumstantial evidences was not sustainable. On this basis, the Commissioner (Appeals) allowed the appeal filed by the importer.

3. In this appeal filed by the Revenue against the impugned order, the grounds taken are that (i) the lower authority had relied on the opinion of the Senior Scientist of the Spices Board of India, (ii) presence of the markings about the origin of cloves as Madagascar on gunny bags and (iii) the discrepancy between the particulars in the packing lists and invoices. In accordance with the Rules of Determination of Origin of Products laid down in Notification No. 73/95-Cus. as required in Notification No. 16/97-Cus. laying down preferential rate of duty for specified goods imported from SAARC countries, the Notification No. 15/97-Cus. extended the concessional rate to goods imported from SAARC countries subject to the condition that the Assistant Commissioner was satisfied about the prescribed conditions regarding rules of origin. The satisfaction of the Assistant Commissioner did not rest upon the certificate of the origin but on the fulfillment of conditions regarding origin. In as much as the competence of the expert was not disputed the opinion of the Senior Scientist was improperly rejecte