Madras High Court
The Commissioner Of Customs vs M/S.Olam Enterprses India Pvt. Ltd on 22 September, 2025
Author: P.Velmurugan
Bench: P.Velmurugan
C.M.A.(MD)No.105 of 2019
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 22 / 09 /2025
CORAM
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
AND
THE HONOURABLE MR.JUSTICE K.K.RAMAKRISHNAN
C.M.A.(MD)No.105 of 2019
The Commissioner of Customs,
Customs House,
New Harbour Estate,
Tuticorin - 628 004. ... Appellant
vs.
M/s.Olam Enterprses India Pvt. Ltd.,
Branch Sl.No.4,12/82, Thainvillai,
Padathalmoodu,
Vilavancode,
Kanyakumari - 629 194. ... Respondent
Prayer: This Civil Miscellaneous Appeal filed under Section 130 of the Customs
Act, 1962, to set aside the impugned order of the CESTAT, South Zonal
Bench, Chennai in Final Order No.40459/2018, dated 19.02.2018.
For Appellant : M/s.R.Nandakumar
Senior Counsel for Customs & CGST
For Respondent : Mr.Joseph Prabakar
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C.M.A.(MD)No.105 of 2019
JUDGMENT
P.VELMURUGAN, J.
This Civil Miscellaneous Appeal is filed to set aside the impugned order
dated 19.02.2018 passed in Final Order No.40459/2018 by the Customs,
Excise & Service Tax Appellate Tribunal (in short "CESTAT"), South Zonal
Bench, Chennai.
2. This appeal arises from the import of teak round logs by the
respondent on commercial invoices issued by M/s.Panasia International
Limited, Dubai. At the time of assessment, the respondent did not claim any
duty exemption and all three Bills of Entry were assessed on merit. The total
duty assessed was Rs.2,25,04,169/-. Subsequently, the respondent filed three
ex-bond Bills of Entry claiming exemption under Notification No.46/2011-Cus.
and produced two AIFTA (ASEAN-India Free Trade Area) certificates certifying
that the goods were consigned from Myanmar Timber Enterprises, Myanmar.
The original authority rejected the claim for duty exemption on the ground
that the AIFTA certificates submitted did not correspond to the subject
consignments, as they showed exports from Myanma Timber Enterprise via
Concorde Commodities, and did not mention the claimed supplier Panasia
International Ltd., Dubai. Therefore, the imported goods were not entitled to
preferential tariff treatment under AIFTA.
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3. On appeal, the Commissioner (Appeals) upheld the order of the
original authority and rejected the appeal.
4. Aggrieved by the same, the respondent filed a further appeal before
the CESTAT. The CESTAT held that the AIFTA certificates covered the
impugned goods imported by the respondent and set aside the order of the
appellate authority. The CESTAT allowed the appeal with consequential
benefits in the following manner:-
9. From the copy of the AIFTA Certificate No.YAI-0647/2014, dated
16.07.2014, the goods are shown to have been certified to have been
consigned from "Myanmar Timber Enterprises, Yangon, Myanmar". The
consignee has been certified as "Olam Agro India Ltd., Kanyakumari, India",
viz., the appellants herein. It is also clarified that the certificate has been
issued "RETROACTIVELY". Thus, it is clear that the impugned goods have
been directly consigned from Myanmar to Kanyakumari, India through
Tuticorin Port. The name of the vessel of transport has been indicated as MV
SIOUX MAIDEN with departure date 31.03.2014. These facts match fully with
the related bill of Lading dated 31.03.2014 and it is clearly indicated therein
that the consignor is "Myanmar Timber Enterprises, Yangon, Myanmar" and
consignee is "Olam Agro India Ltd., Kanyakumari, India". In the AIFTA
certificate, Sl.No.13, the box, "Third Country Invoicing" has been ticked and
in Col.7, the name of "Concorde Commodities Pte., Ltd.," has been indicated".
The Invoice No.631/SHP/GT/I/2014-2015, dated 23.05.2014 is one of the
invoices which has been certified in the said AIFTA certificate. We find that
invoice in page 40 of the appeal book, one that has been issued by Myanmar
Timber Enterprises, Myanmar to M/s.Concorde Commodities, Singapore.
However, even in this commercial invoice, the destination has been shown as
"Tuticorin" and the quantity as being of 43 pieces, 28.82 cubic ton and
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markings "OLAM RED I-193". On Page 41, we find invoice issued by Concorde
Commodities, Singapore to M/s.Panasia International FZCO, UAE, Invoice No.
631/SHP/GT/I/2014-15, dated 23.05.2014. It is interesting to note that the
same invoice number of the Myanmar Timber Enterprises invoice has also
been followed by Concorde Commodities. The identical number of pieces,
quantity in HT and paint marks Red x 193 have been indicated in this invoice
also. The details of the very same ship MV Sloux Maiden has been indicated
in this invoice as also the Port of Discharge as Tuticorin, India. From Page 48
of the appeal book, we find the Commercial Invoice No.0392/13-14 from
Panasia International FZCO, UAE, dated 31.03.2014 to the appellant, which
has been issued for a total 2536 pieces and total quantity 1,504.146 HT. In
the attachment to the said commercial invoice, the Lot No. with Paint Mark
RED X-193 consisting of 46 pieces of teak logs with quantity of 28.818 HT
has been separately shown. The said commercial invoice of Panasia
International FZCO also indicates the Port of shipment as Yangon and Port of
Discharge as Tuticorin, India. The originating vessel "M.V.SIOUX MAIDEN"
has also been indicated in this invoice.
10. From the above, we find that the appellants have adduced
sufficient proof to establish that the impugned goods, though invoiced by
Panasia International UAE, to the appellant, are of very same ones which
have been originally invoiced by Myanmar Timber Enterprises, Myanmar to
Concorde Commodities, Singapore and then to M/s.Panasia Agro India
Limited. The appellants have been also able to sufficiently establish the
seminal connection and linkage with the imported goods invoiced at
M/s.Panasia International limited, Dubai and the AIFTA certificates submitted
by them. This being so, we are of the considered opinion that the AIFTA
certificates very much covers the impugned goods which have been
imported by the appellant and in view of Article 22 of the Procedures, issue
of invoice by party in third country namely M/s.Panasia International Limited,
Dubai will not negate the benefit of the AIFTA certificate and the benefit of
Notification No.46/2011-Cus. The impugned order, which holds a contrary
view will therefore have to be set aside which we hereby do. The appeal is
allowed with consequential benefits, if any as per law.
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Challenging the order passed by the CESTAT, the appellant / Customs is before
this Court.
5. The learned Senior Standing Counsel appearing for the appellant
submitted that during the verification of the xerox copy of the AIFTA
certificates at the time of filing of the ex-bond Bills of Entry, Box No.13 was
not ticked, and this discrepancy was clearly discussed in the Assistant Director
of Safeguard’s (ADS) letter dated 21.07.2015 and the Order-in-Original. The
name of the third-party supplier, M/s. Panasia International Ltd., Dubai, was
not mentioned in Box No. 7 of the AIFTA certificate. Instead, the name
Concorde Commodities PTE Ltd., Singapore was mentioned, which is not the
actual third country supplier. Most of the invoices mentioned in the AIFTA
certificates were issued after 31.03.2014 (the date of the Bill of Lading) and
even after 21.05.2014 (the date of warehousing). This suggests that the
invoices were backdated and do not correlate with the AIFTA certificates,
thereby rendering the certificates invalid. The tribunal overlooked the fact that
the identical invoice number and date were followed by both Myanmar Timber
Enterprises and Concorde Commodities, which raises doubts about the
authenticity of the documents. The respondent attempted to correlate the
subject consignments with the AIFTA certificate solely on the ground that the
quantity imported matched the quantity mentioned in the certificates.
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However, this does not establish the validity of the certificates. The CESTAT
erred in extending AIFTA benefits to the respondent despite the
inconsistencies and contradictions in the documentation. Hence, the learned
counsel prays to set aside the order of the CESTAT.
6. The learned counsel for the respondent submitted that the goods
were consigned from Myanmar Timber Enterprises, Myanmar, and the AIFTA
certificates were validly issued under the ASEAN-India Free Trade Agreement.
The CESTAT correctly noted that the vessel details, bill of lading, and other
shipping details matched the AIFTA certificates, thereby establishing a direct
connection with the imported goods. The retroactive issuance of the AIFTA
certificates is permitted under AIFTA rules, and the benefit of Notification No.
46/2011-Cus. cannot be denied due to minor administrative errors when the
substantive requirements of the AIFTA rules have been satisfied. Hence, the
learned counsel prays to dismiss this appeal.
7. This Civil Miscellaneous Appeal is admitted on the following
substantial questions of law:-
"(i) Whether the CESTAT is correct in holding that the
impugned AIFTA Certificates produced by the first respondent
without incorporating the name of the third party viz.,
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M/s.Panasia International, was issued in accordance with the
AIFTA Rules or Origin?
(ii) Whether the CESTAT is correct in holding that based
on the impugned AIFTA Certificates produced by the first
respondent, they are eligible for grant of exemption from the
payment of import duty on the imported cargo under
Notification No.46/2011-Cus., dated 01.06.2011?"
8. Under Notification No.46/2011-Cus., the benefit of exemption can be
availed only when a valid and genuine certificate of origin is produced in
conformity with the AIFTA Rules. It is settled law that the burden is upon the
importer to establish eligibility for the exemption and unless the certificate
strictly satisfies the conditions prescribed, the benefit cannot be granted. In
the present case, the documents relied upon by the respondent cannot be
said to constitute a valid certificate for more than one reason. At this
juncture, it would be useful to refer to the order of the original authority,
which rejected the claim for duty exemption on the ground that the AIFTA
certificates submitted do not correspond to the subject consignments:-
12. For this their recent submission, it is clarified that the AIFTA
certificates clearly shows that the consignment was exported by Myanma
Timber Enterprise, Myanmar to Olam Agra India Limited, India through
Concorde Commodities PTE Ltd. Absence of the supplier's name M/s.Panasia
International Ltd., Dubai in the certificates cannot be taken as minor/clerical
discrepancy. Now, as requested by the importer, vide letter dated
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18.02.2016, this speaking order is issued under the Customs Act, 1962.
13. On verification of the import documents, AIFTA certificates
produced and various written submissions made by the importer, it is clearly
established that the AIFTA certificates submitted are not correlated with
subject consignments. According to Custom Tariff (Determination of Origin of
Goods under the Preferential Trade Agreement between the Government of
Member States of the Association of Southeast Asian Nationals (ASEAN) and
the Republic of India) Rules 2009 any claim that a product shall be accepted
as eligible for preferential tariff treatment shall be supported by an AIFTA
Certificate. In this case, the subject consignment is not supported with any
AIFTA certificate because the AIFTA certificates produced are no way
connected with the subject consignment. Therefore, the imported goods are
not entitled for preferential tariff treatment under AIFTA notification.
Accordingly I pass the following orders:-
ORDER
I reject the claim of duty exemption under Notification No.46/2011
Customs dated 01.06.2011 in r/o Bills of Entry 7318577/10-11-2014,
8079800/23-01-2015 & 8079804/23-01-2015 since the AIFTA certificates
produced do not in fact correspond to the subject consignment.
9. A perusal of the above order of the original authority shows that the
AIFTA certificates submitted do not correspond to the subject consignments.
Further, the Bill of Lading shows that the vessel carrying the goods, namely
MV Sioux Maiden, departed from Myanmar on 31.03.2014. However, the
invoices included in the certificate are dated 23.05.2014, nearly two months
later. This is a clear mismatch. Once the goods had already been shipped in
March 2014, it is wholly improbable and unacceptable that invoices relating to
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the very same consignment were issued subsequently in May 2014. Such
discrepancy casts serious doubt on the authenticity of the documents. An
invoice issued after the shipment cannot establish the origin of goods already
transported, and therefore the very foundation of the certificate becomes
unreliable.
10. Further, regarding the AIFTA Rules on third-country details, the
certificate fails to mention M/s. Panasia International Ltd., Dubai, and instead
shows the name of Concorde Commodities PTE Ltd., Singapore, which does
not represent the actual third-country details.
11. The Tribunal, however, overlooked these serious defects and
proceeded on the footing that since the quantities mentioned in the certificate
tallied with the goods imported, the exemption must follow. This reasoning is
fundamentally flawed. Tallying of quantities or vessel particulars cannot
substitute for compliance with the mandatory requirements of law. The main
issue is not whether the goods correspond to the certificate, but whether the
certificate itself is valid, genuine and issued in accordance with the AIFTA
Rules. Once the certificate is defective on the face of the record, the claim of
exemption necessarily fails.
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12. Insofar as the first substantial question of law is concerned, the
vessel MV Sioux Maiden departed from Myanmar on 31.03.2014 with the
imported goods. However, the invoices included in the certificate are dated
23.05.2014, almost two months later. Once the shipment had already taken
place in March 2014, an invoice dated in May 2014 cannot be relied upon to
prove the origin of goods already transported. This clear mismatch between
the shipment date and the invoice date casts serious doubt on the
authenticity of the certificate. Further, the actual supplier to the respondent
was M/s. Panasia International Ltd., Dubai, yet the certificate mentions
Concorde Commodities, Singapore. Such omissions and discrepancies cannot
be regarded as minor issues, since they fundamentally affect the authenticity
and reliability of the certificate. The Tribunal, however, overlooked these
lapses and treated the certificates as valid under the AIFTA Rules, which was
not correct.
13. Insofar as the second substantial question of law is concerned, the
law is settled that the burden lies on the importer to establish eligibility for
exemption, and such benefit can be claimed only on the basis of a valid and
genuine certificate of origin issued in conformity with the Rules. Here, the
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respondent failed to discharge that burden. Nevertheless, the Tribunal
granted exemption merely because the quantities and vessel particulars tallied
with the goods imported. However, tallying of particulars cannot substitute for
the mandatory requirement of producing a valid certificate. The Tribunal was
not correct in adopting such reasoning, since without a valid certificate, no
exemption under Notification No.46/2011-Cus. can be granted.
14. Accordingly, the first substantial question of law is answered in
favour of the appellant/Customs by holding that the Tribunal was not correct
in treating the defective certificates as valid under the AIFTA Rules. The
second substantial question of law is also answered in favour of the
appellant/Customs by holding that the Tribunal wrongly extended the benefit
of exemption under Notification No.46/2011-Cus. without a valid certificate.
Both questions are thus decided against the respondent. Consequently, the
appeal filed by the appellant/Customs is allowed, the order of the CESTAT is
set aside, and the orders of the original authority as well as the Commissioner
(Appeals) are confirmed. No costs.
(P.V., J.) (K.K.R.K., J.)
22 / 09 /2025
NCC:Yes/No
Index:Yes/No
Speaking/Non-speaking order
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rns
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To
1.The CESTAT, South Zonal Bench,
Chennai.
2.The Commissioner of Central Excise (Appeals-II),
No.1, Williams Road, Cantonment,
Trichirappalli - 620 001.
3.The Commissioner of Customs,
Customs House,
New Harbour Estate,
Tuticorin - 628 004.
P.VELMURUGAN, J.
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and
K.K.RAMAKRISHNAN, J.
rns
22 / 09 / 2025
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