OFFICE OF THE PRINCIAPAL

COMMISSIONER OF CUSTOMS
CUSTOMS HOUSE, MP & SEZ
MUNDRA, KUTCH-GUJARAT -370421
PHONE : 02838-271426/271428
FAX :02838-271425

A File No. CUS/APR/SCN/813/2023-Gr 4

B OIO No. MCH/562 /AC/KRP/GR4/24-25

K. R. Parmar,
C Passed by Assistant Commissioner, Import Section Gr-IV,
Custom House, Mundra.
M/s. J K ENTERPRISE,
Noticee / Party / 2ND FLOOR HOUSE NO- 201 WAZIRPUR,INDL.
D
Importer AREA IP TOWER NORTH WEST, DELHI - 110
052
E DIN 20241071MO0000222E0E

1. The Order – in – Original is granted to concern free of charge.

2. Any person aggrieved by this Order – in – Original may file an appeal under
Section 128 A of Customs Act, 1962 read with Rule 3 of the Customs (Appeals)
Rules, 1982 in quadruplicate in Form C. A. 1 to

The Commissioner of Customs (Appeal), MUNDRA,

Office at 7th floor, Mridul Tower, Behind Times of India,
Ashram Road Ahmedabad-380009

3. Appeal shall be filed within Sixty days from the date of Communication of
this Order.

4. Appeal should be accompanied by a Fee of Rs. 5/- (Rupees Five Only) under
Court Fees Act it must accompanied by (i) copy of the Appeal, (ii) this copy of the
order or any other copy of this order, which must bear a Court Fee Stamp of Rs.
5/- (Rupees Five Only) as prescribed under Schedule – I, Item 6 of the Court Fees
Act, 1870.

5. Proof of payment of duty / interest / fine / penalty / deposit should be

attached with the appeal memo.

6. While submitting the appeal, the Customs (Appeals) Rules, 1982 and other
provisions of the Customs Act, 1962 should be adhered to in all respect.

An appeal against this order shall lie before the Commissioner (A) on payment of
7.5% of the duty demanded where duty or duty and penalty or Penalty are in
dispute, where penalty alone is in dispute.
CUS/APR/SCN/813/2023-Gr 4-O/o Pr Commr-Cus-Mundra-Part(1) I/2386633/2024

Brief facts of the case

M/s. J K ENTERPRISE, 2ND FLOOR HOUSE NO- 201 WAZIRPUR,INDL.

AREA IP TOWER NORTH WEST, DELHI - 110 052 (hereinafter referred to as
‘the importer’ for the sake of brevity), filed bill of entry No 9237542 dated
13/12/2018 (hereinafter referred to as “said bill of entries”) through its Custom
Broker M/s. Cargo Clearign Agency (Guj) for import of goods declared as
“Stainless Steel Cold Rolled Coils AIFTA “REF NO-KL-2018-AI-129832 dated
26/11/2018” (hereinafter referred to as ‘said goods’) falling under CTH
72209090 of the Customs Tariff Act, 1975 availing the benefit of Sr. No. 967(I)
of Notification No. 046/2011 dated 01.06.2011 on the basis of Certificate of
Origin purportedly issued by the Ministry of International Trade and Industry,
Malaysia. Details of the said bill of entry are as under:
Table - A
COO Name of
Sr. Bill of Entry Description of Assessable
reference Supplier
No. and Date Goods Value (INR)
no.
Stainless Steel KL-2018-AI- M/s.
9237542 129832 JENTAYU
1. Cold Rolled 4999609/-
13/12/2018 dated INDUSTRY
Coils 26/11/2018

2. Letter F. No. DIC/FTA/70/2023-FTA Cell IV-O/o Pr COMMR-DIC-DELHI

dated 11.10.2023 issued by Deputy Commissioner & OSD (Cell-4), FTA Cell,
Directorate of International Customs, CBIC, indicated that the importer
imported “Stainless Steel Cold Rolled Coils” classifying the same under CTH
7220 9090 through Malaysia and violating the Rules meant for Determination
of Origin of Goods under the Preferential Trade Agreement between the
Government of ASEAN and India Rules, 2009 in order to avail exemption from
payment of Basic Custom Duty. In view of the above mis-declaration by the
importer, undue benefit on the basis of the preferential certificate of origin was
availed which resulted into misuse of the FTA resulting in evasion of customs
duty.

3. In view of above, it appears that the COO No. KL-2018-AI-129832 dated

26/11/2018 issued in the name of supplier M/s. JENTAYU INDUSTRY was fake
and was never issued by MITI, Malaysia. Thus, the COO certificate submitted by
the importer to avail the benefit of Sr. No. 967(I) of Notification No. 046/2011 –
Customs dated 01.06.2011, is not authentic.
4. The details of the consignment and the amount of differential duty as a
result of producing the fake certificates of origin are as under:
Table – B
(In INR)
Sr. B/E No. & BCD @ SWS
No. Date A.V. 7.5% @10% of IGST
@18% Total duty Duty Paid Diff. Duty
BCD
9237542
1 4999609/- 374970/- 37497/- 974173/- 1386641/- 899930/- 486712/-
CUS/APR/SCN/813/2023-Gr 4-O/o Pr Commr-Cus-Mundra-Part(1) I/2386633/2024

13/12/2018

In view of the above, it appears that the importer has evaded the customs
duty to the tune of Rs. 486712/- by submission of fake & forged COO
certificate.
5. Legal Provisions:

5.1 Proviso to Notification No. 046/2011 dated 01.06.2011 is re-produced

hereinbelow:
Provided that the importer proves to the satisfaction of the Deputy Commissioner of
Customs or Assistant Commissioner of Customs, as the case may be, that the goods in
respect of which the benefit of this exemption is claimed are of the origin of the
countries as mentioned in Appendix I in accordance with provisions of the Customs
Tariff [Determination of Origin of Goods under the Preferential Trade Agreement
between the Governments of Member States of the Association of Southeast Asian
Nations (ASEAN) and the Republic of India] Rules, 2009, published in the notification of
the Government of India in the Ministry of Finance (Department Of Revenue) No.
189/2009-Customs (N.T.), dated the 31st December, 2009.

5.2 It appeared that in terms of Rule 13 of Notification No. 189/2009-

Customs(N.T.) Dated 31.12.2009, the exemption from payment of duty vide Sl.
No. 967(I) of 046/2011-Cus dated 01.06.2011 under ASEAN India Free Trade
Agreement claimed by the importer in the subject B/E would be granted subject
to the condition that the importer produces a valid certificate of Origin, in
support of their claim that the product is eligible for preferential tariff treatment
as per the specimen in the attachment to the Operational Certification
Procedures issued by a Government authority designated by the exporting party
and notified to the other parties in accordance with the Operational
Certification Procedures as set out in the Annexure III annexed to Customs
Tariff (Determination of Origin of Goods under the Preferential Trade Agreement
between the Governments of Member States of the Association of Southeast
Asian Nations (ASEAN) and the Republic of India) Rules, 2009. Text of the Rule
13 of Notification No. 189/2009-Customs (N.T.) dated 31.12.2009 reads as
follows:
“13. Certificate of Origin - Any claim that product shall be accepted was eligible for
preferential tariff treatment shall be supported by a Certificate of Origin as per the
specimen in the Attachment CO the Operational Certification Procedures issued by a
Government authority designated by the exporting party and notified to the other
parties in accordance with the Operational Certification Procedures as set out in
Annexure III annexed to these rules.”

5.3 Further Rule - 1 of above referred Annexure-III requires that the AIFTA
Certificate of Origin shall be issued by the Government authorities (Issuing
Authority), of the exporting party. Text of the Rule -1 of the Annexure-III, reads
as follows: -
CUS/APR/SCN/813/2023-Gr 4-O/o Pr Commr-Cus-Mundra-Part(1) I/2386633/2024

1. The AIFTA Certificate of Origin shall be issued by the Government authorities

(Issuing Authority) of the exporting party.

5.4 Section 28(4): Where any duty has not been levied or not paid or has been short-levied
or short-paid or erroneously refunded, or interest payable has not been paid, part-paid or
erroneously refunded, by reason of-
(a) collusion; or
(b) any willful mis-statement; or
(c) suppression of facts,
by the importer or the exporter or the agent or employee of the importer or exporter, the
proper officer shall, within five years from the relevant date, serve notice on the person
chargeable with duty or interest which has not been so levied or not paid or which has been so
short-levied or short-paid or to whom the refund has erroneously been made, requiring him to
show cause why he should not pay the amount specified in the notice.
5.5 28AA. Interest on delayed payment of duty.

(1) Notwithstanding anything contained in any judgment, decree, order or direction of

any court, Appellate Tribunal or any authority or in any other provision of this Act or the rules
made thereunder, the person, who is liable to pay duty in accordance with the provisions of
section 28, shall, in addition to such duty, be liable to pay interest, if any, at the rate fixed
under sub-section (2), whether such payment is made voluntarily or after determination of the
duty under that section.

(2) Interest at such rate not below ten per cent. and not exceeding thirty-six per cent.
per annum, as the Central Government may, by notification in the Official Gazette, fix, shall be
paid by the person liable to pay duty in terms of section 28 and such interest shall be
calculated from the first day of the month succeeding the month in which the duty ought to
have been paid or from the date of such erroneous refund, as the case may be, up to the date
of payment of such duty.

5.6 SECTION 46. Entry of goods on importation. — (1) The importer of any goods, other
than goods intended for transit or transshipment, shall make entry thereof by presenting
[electronically] [on the customs automated system] to the proper officer a bill of entry for home
consumption or warehousing [in such form and manner as may be prescribed:
..
..
(4) The importer while presenting a bill of entry shall make and subscribe to a
declaration as to the truth of the contents of such bill of entry and shall, in support of
such declaration, produce to the proper officer the invoice, if any, [and such other
documents relating to the imported goods as may be prescribed].
(4A) The importer who presents a bill of entry shall ensure the following,
namely: -
(a) the accuracy and completeness of the information given therein;
(b) the authenticity and validity of any document supporting it; and
(c) Compliance with the restriction or prohibition, if any, relating to the goods
under this Act or under any other law for the time being in force.
…

5.7 SECTION 111. Confiscation of improperly imported goods, etc. - The following goods
brought from a place outside India shall be liable to confiscation:
..
(m) any goods which do not correspond in respect of value or in any other particular]
with the entry made under this Act or in the case of baggage with the declaration
CUS/APR/SCN/813/2023-Gr 4-O/o Pr Commr-Cus-Mundra-Part(1) I/2386633/2024

made under section 77 [in respect thereof, or in the case of goods under transhipment,
with the declaration for transhipment referred to in the proviso to sub-section (1) of
section 54;
..
(o) any goods exempted, subject to any condition, from duty or any prohibition in
respect of the import thereof under this Act or any other law for the time being in force,
in respect of which the condition is not observed unless the non-observance of the
condition was sanctioned by the proper officer;

5.8 SECTION 114A. Penalty for short-levy or non-levy of duty in certain cases. - Where the
duty has not been levied or has been short-levied or the interest has not been charged or paid
or has [xxx] been part paid or the duty or interest has been erroneously refunded by reason of
collusion or any willful mis-statement or suppression of facts, the person who is liable to pay
the duty or interest, as the case may be, as determined under [sub-section (8) of section 28]
shall also be liable to pay a penalty equal to the duty or interest so determined :
Provided that where such duty or interest, as the case may be, as determined under
[sub-section (8) of section 28], and the interest payable thereon under section [28AA], is
paid within thirty days from the date of the communication of the order of the proper
officer determining such duty, the amount of penalty liable to be paid by such person
under this section shall be twenty-five per cent of the duty or interest, as the case may
be, so determined:
Provided further that the benefit of reduced penalty under the first proviso shall be
available subject to the condition that the amount of penalty so determined has also
been paid within the period of thirty days referred to in that proviso:

5.9 SECTION 114AA. Penalty for use of false and incorrect material. - If a person knowingly
or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration,
statement or document which is false or incorrect in any material particular, in the transaction
of any business for the purposes of this Act, shall be liable to a penalty not exceeding five
times the value of goods.

6. Accordingly, both the Show Cause Notice F.No. CUS/APR/SCN/813/2023-

Gr.4 dated 30.10.2023 and Corrigendum dated 31.08.2024 was issued to M/s.
J K ENTERPRISE for proposals of:

Rejection of certificate of country of origin used for availment of concessional

rate of customs duty
Demand of differential Customs duty of Rs. 486712/- under Section 28(4) of the
Customs Act, 1962 along with applicable interest thereon under Section 28AA
of the Customs Act, 1962
Imposition of penalty under Section 114A on the Importer
Imposition of penalty under Section 114AA on the Importer.

Personal Hearing
7 . Personal Hearing in the matter, was Fixed on Dated 05-03-2024, 23-04-
2024 and 13.09.2024. However, the noticee M/s J K ENTERPRISE has neither
submitted any defence submission nor appeared for any of the personal
hearings. It is observed that sufficient opportunity has been given to Noticee
but they chose not to join adjudication proceedings. Considering the scenario,
CUS/APR/SCN/813/2023-Gr 4-O/o Pr Commr-Cus-Mundra-Part(1) I/2386633/2024

there is no option but to proceed with the adjudication proceedings in terms of

merit of the case ex-parte.

Discussion and findings:

8. I have carefully gone through the case records and importer’s letter dated
12.09.2024. I find that the condition of Principles of Natural Justice under
Section 122A of the Customs Act, 1962 has been complied. Hence, I proceed to
decide the case on the basis of facts and documentary evidences available on
records.

9. The issues before me are to decide whether-

i. The duty exemption benefit of the Notification No. 46/2011-Cus. dated

01.06.2011, as amended, claimed and extended at the time of assessment of
bills of entries as mentioned in Table-A is liable to be denied and differential
duty with interest is liable to be demanded and recovered or otherwise.
ii. Interest on the differential duty should not be recovered under Section 28AA of
the Customs Act, 1962 or otherwise.
iii. Penalty under Section 114A of the Customs Act, 1962 should not be imposed
on the Importer or otherwise.
iv. Penalty under Section 114AA of Customs Act, 1962 should not be imposed on
the Importer or otherwise.

10. I find that the Importer filed bill of entry No. 9237542 dated 13/12/2018
for import of “Stainless Steel Cold Rolled Coils” falling under CTH 7220 9090 of
the Customs Tariff Act, 1975 from supplier M/s. JENTAYU INDUSTRY, availing
the benefit of Sr. No. 967(I) of Notification No. 046/2011 dated 01.06.2011
on the basis of Certificate of Origin No. KL-2018-AI-129832 dated 26/11/2018
purportedly issued by the Ministry of International Trade and Industry,
Malaysia.

11. I find that COO Certificate as mentioned in Table-A which was purported
to be issued by the Ministry of International Trade and Industry, Malasiya, was
found to be fake as per inquiry vide F. No. DIC/FTA/70/2023-FTA Cell IV-O/o
Pr COMMR-DIC-DELHI dated 11.10.2023 issued by Deputy Commissioner &
OSD (Cell-4), FTA Cell Directorate of International Customs, CBIC.

12. I find that a conspiracy was hatched by the Importer to defraud the
Government of India’s legitimate revenue by mis-use of the benefits of
concessional rate of customs duty under Notification No. 46/2011-Cus. dated
01.06.2011 as amended. Pursuant to the said conspiracy, the Importer availed
the benefit of concessional rate of customs duty under Notification No.
46/2011-Cus. dated 01.06.2011 by submitting the fake Preferential Certificates
of origin in ‘Form-AI’ obtained by mis-representation and collusion in
contravention of provisions of Rules of Origin for seeking the benefits of
concessional rate of duty, with an intention to evade the payment of customs
CUS/APR/SCN/813/2023-Gr 4-O/o Pr Commr-Cus-Mundra-Part(1) I/2386633/2024

duty. The certificate produced by the Importer was found to be unauthentic

during the process of verification.

13. I find that the Importer had made wrong declarations for availing the
undue benefit under the Notification No. 46/2011-Cus. dated 01.06.2011,
therefore, the goods were imported by the importer in contravention of the
provisions of Notification No. 46/2011-Cus. dated 01.06.2011, as amended
read with Notification No. 189/2009-Cus. (N.T.) dated 31.12.2009. Further, due
to deliberate and intentional submission of fraudulently obtained unauthentic
preferential Certificates of origin in ‘Form-AI’ for availing exemption under FTA,
the goods in the BE do not correspond to the documents submitted and
declaration in the Bill of Entry.

14. From the above discussions, I find that the goods imported by importer
do not qualify the requirement as of Origin of Goods as laid out under
Notification No. 189/2009-Cus (N.T.) dated 31.12.2009 and the importer had
not correctly declared the facts before the Customs authorities, thereby wrongly
availing the benefits of concessional rate of customs duty under Notification No.
46/2011 dated 01.06.2011, therefore, the amount of differential duty of Rs.
486712/- is recoverable with interest from the importer under the extended
period provisions of Section 28(4) of the Customs Act, 1962 read with Section
28AA of the Customs Act, 1962, for the reasons brought out in foregoing paras.
I hold accordingly. Further, as the Importer has evaded the customs duty by
collusion, willful mis-statement and suppression of facts as discussed in
foregoing paras, I hold the Importer liable for penalty under Section 114A of the
Customs Act, 1962.

15. Further, I find that the importer has used fake and forged Country of
Origin documents to avail duty benefit. In view of the deliberate and intentional
submission of fraudulently obtained unauthentic preferential Certificates of
origin in ‘Form-AI’ for availing exemption under FTA, I hold the importer liable
for penalty under Section 114AA of the Customs Act, 1962.

16. In view of foregoing discussion and findings, I pass the following order:
Order

i. I order to reject benefit of Certificate of Origin KL-2018-AI-129832 dated

26/11/2018 used for availment of concessional rate of customs duty inBill of
Entry No. 9237542 dated 13/12/2018 and order to re-assess the said goods on
merit rate of duty.
ii. I confirm and order to recover differential duty ofRs. 4,86,712/- (Rupees Four
lakh Eighty Six Thousand Seven Hundred and Twelve only) under section
28(4) of Customs Act, 1962.
iii. I confirm and order to recover applicable interest on the differential duty above
under Section 28AA of Customs Act, 1962.
iv. I impose a penalty o f Rs. 4,86,712/- (Rupees Four lakh Eighty Six Thousand
CUS/APR/SCN/813/2023-Gr 4-O/o Pr Commr-Cus-Mundra-Part(1) I/2386633/2024

Seven Hundred and Twelve only) on the Importer under Section 114A of
Customs Act, 1962.
v. I impose a penalty o f Rs. 2,00,000/- (Rs. Two Lakhs only) on the Importer
under Section 114AA of Customs Act, 1962.

17. This order is issued without prejudice to any other action which may be
contemplated against the importer or any other person under provisions of the
Customs Act, 1962 and rules/regulations framed thereunder or any other law
for the time being in force in the Republic of India.

18. The SCN F. No. CUS/APR/SCN/813/2023-Gr-4 dated 30.10.2023

issued by the Assistant Commissioner, Group-4, Custom House Mundra, is
hereby disposed of.

Assistant Commissioner
Import Assessment Gr IV
Custom House, Mundra

F. No. CUS/APR/MISC/813/2023-Gr 4 Date :26-10-2024

To,
M/s. J K ENTERPRISE,
2ND FLOOR HOUSE NO- 201 WAZIRPUR,INDL.
AREA IP TOWER NORTH WEST,
DELHI - 110 052
Copy to:

1. The Dy. Commissioner of Customs, Review Section, CH, Mundra

2. The Dy. Commissioner of Customs, TRC, CH, Mundra
Guard file