Certificate of Origin Prevails

The Chennai Bench of the CESTAT held that Customs authorities cannot deny preferential duty benefits under the Indo–Thailand Free Trade Agreement by unilaterally re-computing Local Value Added Content (LVAC) through a methodology not contemplated under the Rules of Origin. 

The Tribunal ruled that a valid Certificate of Origin issued by the designated authority of the exporting country carries statutory sanctity and cannot be disregarded without following the prescribed verification mechanism. 

Consequently, the demand of differential customs duty, invocation of the extended limitation period and imposition of penalties were set aside.