Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CESTAT) 1652

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
R. Muralidhar, Judicial Member, K. Anpazhakan, Technical Member
Aone Agro Products Pvt. Ltd. – Appellant
Versus
Commissioner of Customs – Respondent
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Advocates:
For the Appellants/Petitioners: Arijit Chakrabarti
For the Respondents: Faiz Ahmed

Certificates of Origin issued by competent authorities under trade agreements are substantive evidence. Customs authorities cannot unilaterally reject them without evidence of forgery or cancellation. Furthermore, Revenue must provide positive evidence of suppression to invoke the extended period of limitation under Section 28(4) of the Customs Act.

Headnote:(A) Customs Act, 1962 - Section 28(4) and (9) - Section 17(5) - Section 110AA - Import of oil under preferential tariff - Denial of customs duty exemption based on alleged misdeclaration of origin - Certificates of Origin issued by designated authority of exporting country act as substantive evidence - In the absence of proof of forgery or cancellation of such certificates by the issuing authority, customs authorities cannot unilaterally reject them based on assumptions regarding production capability. (Paras 35, 38, 45, 60)

(B) Customs Act, 1962 - Section 17 - Re-assessment of self-assessed Bills of Entry - While authorities may possess power to re-assess, doing so by applying test results of a few samples to all consignments across a long duration without evidence of uniform physical characteristics is legally untenable - Sampling must be representative to fasten liability. (Paras 11, 12, 47, 51, 60)

(C) Limitation of Time - Extended period of limitation under Section 28(4) - Requires positive evidence of suppression, fraud, or collusion - Mechanical reliance on post-import laboratory findings to justify extended period, despite documentation being available at time of import, does not satisfy the legal threshold for invoking extended period of limitation. (Paras 17, 19, 52, 53)

Facts of the case:
Importers sought exemption of import duty on oil under a regional free trade agreement, supported by Certificates of Origin. After clearance for domestic consumption, investigation was initiated challenging the classification and country of origin, alleging that the goods were not produced as certified. Demands for differential duty, interest, and penalties were confirmed by the adjudicating authority.

Findings of Court:
Authorities failed to establish any case of fraud or suppression by the importers. The evidentiary value of the Certificates of Origin remained intact as they were neither withdrawn nor recalled by the issuing nation. Furthermore, the sampling methodology adopted after the goods were already sold was inadequate and non-representative, rendering the demand for differential duty unsustainable.

Issues: Whether the customs authorities have the jurisdiction to unilaterally reject valid Certificates of Origin and whether the extended period of limitation can be invoked in the absence of evidence of willful misstatement or suppression by the importer.

Ratio Decidendi: Certificates of Origin issued by a competent authority of a contracting state constitute conclusive evidence unless recalled or cancelled; therefore, they cannot be discarded based on mere surmises regarding production capabilities of the exporting nation. Additionally, the revenue must prove positive evidence of fraud to sustain a demand for an extended period of limitation.

Result: Appeals allowed.

Table of Content
1. validity and conclusiveness of certificates of origin under safta trade agreements. (Para 1 , 4 , 13 , 33 , 45)
2. time-barring of show cause notices and lack of evidence for extended limitation period. (Para 5 , 7 , 8 , 16 , 52 , 53)
3. procedural aspects of challenging self-assessed bills of entry versus recovery proceedings under section 28. (Para 9 , 56 , 57 , 58 , 59)
4. inapplicability of selective sample testing results to entire batches of disparate consignments. (Para 10 , 11 , 12 , 46 , 47 , 50 , 51)

ORDER: [PER SHRI R. MURALIDHAR]

1. The appellants have imported Crude Rapeseed Oils / Mustard Oils classifying the same under CTH 1514 9190 / 1514 9120 from Bangladesh, claiming Customs Duty exemption in terms of Notification No.75/2006 Cus (NT) dated 30.06.2006 read with Notification No.99/2011 Cus dated 09.11.2011 as amended from time to time, applicable for imports carried out under South Asian Free Trade Area [SAFTA] Agreement. For claiming the SAFTA benefit, the appellants filed the SAFTA Certificate of Origin issued by the Bangladesh Authorities. Much later after the goods were imported and cleared for domestic consumption, the DRI, after some enquiries and investigation, came to a conclusion that the goods imported had less than 2% Erucic Acid and hence the same would be classifiable under Low Erucic Acid Rapeseed [LEAR] oil. It was their contention that Bangladesh had no facility to produce the Rapeseed with less than 2% Erucic acid. The rapeseed with less than 2% Erucic is only produced by Canada and hence the oil obtained is also known as Canola oil. Therefore, it was contended that the SAFTA Certificates of Origin issued certifying at Box 8 as “A” depicting the product as “wholly produced or obtained” in Bangladesh, is false and hence, the Customs Duty exemption benefit granted by way of these SAFTA Certificates of Origin, is liable to be recovered from the importers. The imports had taken place between 18th December, 2019 to 6th February, 2020. The Show Cause Notices came to be issued on 17.10.2022, to the importers, their Directors, Officials etc. After due process, the demands were confirmed along with interest and penalties were imposed on all the noticees. Being aggrieved, the appellants have filed the present appeals before the Tribunal.

2. Since the issue is common and mode of investigation, issue of SCN and Adjudication proceedings are identical, with the consent of both the sides, all the appeals have been taken up together for disposal. Ld. Counsel Sri Arijit Chakrabarti appears on behalf of all the appellants.

3. The Ld. Counsel submits that details of the imports and proceedings in respect of the four importers as per the following Table:

Sl. No.	Name of Importer	Period of dispute	Total number of past B/E	Total import quantity (in MTs)	Total value of import (in Rs.)	SCN No. & Date	OIO No. & Date
A.	M/s. Aone Agro Products Pvt. Ltd.	18.12.2019 to 06.02.2020	26	2525	19,12,86,258	C. No. VIII (48)83/ CUS/ AONE AGRO/ DRI/ SCN/ GJD-LCS/2022 dated 17.10.2022	16/CUS/CC (P)/WB/2023-24 dated 28.12.2023
B.	Sanjoy Deb, Prop. of M/s. Sowallow Enterprises	29.12.2019 to 06.02.2020	18	1720	13,89,74,908	C. No. VIII (48)82/ CUS/ SOWALLOW/ DRI/ SCN/ GJD-LCS/2022 dated 19.10.2022	11/CUS/CC (P)/WB/2023-24 dated 29.11.2023
C.	M/s. Bengani Commodities Pvt. Ltd.	07.11.2019 to 30.01.2020	27	3429	25,79,98,459	C. No. VIII (48)85/ CUS/ BENGANI/ DRI/ SCN/ GJD-LCS/2022 dated 17.10.2022	17/CUS/CC (P)/WB/2023-24 dated 29.12.2023
D.	M/s. V. K. Oils Ltd.	05.12.2019 to 05.02.2020	15	1669	12,46,95,696	-	-

4. He submits that while the appellants have classified the imported goods under CTH 1514 9190 / 1514 9210 and the Revenue has taken the stand that the same would fall under CTH 1514 1120 [Low Erucic Acid Rapeseed (LEAR)]. The Customs Duty component is same in respect of all these Tariff Headings. However, the Revenue is viewing the imported goods as LEAR or Canola Oil and

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