2010 (8) TMI 614 - HC - Central Excise

Imposition of export duty - Effective date - On the date of filing of shipping bill, there was no export duty and there was only export cess which had been paid by the respondents - Admittedly, the loading of goods was also commenced much prior to the imposition of export duty - The export duty was introduced only with effect from 1-3-2007 - Under Section 51 of the Act is a composite order permitting clearance and loading of the goods for export and when such an order is passed, the relevant duty in terms of Section 16 is being date of that order, subsequent change in the rate of duty does not render the earlier order invalid - Since the assessment has been made prior to the imposition of export duty i.e. on 1-3-2007, and the same being collected prior to 1-3-2007, subsequent changes in the rate of duty are inconsequential - Decided in favour of assessee.

Summary

Issues:
- Determination of export duty liability on iron ore shipments.
- Interpretation of relevant provisions of the Customs Act.
- Validity of the order passed by the Customs, Excise and Service Tax Appellate Tribunal.

Issue 1: Determination of export duty liability on iron ore shipments

The case involved a dispute regarding the imposition of export duty on iron ore shipments by M/s. Kineta Minerals and Metals Ltd. The Commissioner of Central Excise, Guntur directed the payment of export duty based on the remaining quantity of iron ore not covered by boat notes. The Customs, Excise and Service Tax Appellate Tribunal set aside the order, leading to the department's appeal. The Tribunal's decision was based on the timing of duty assessment and payment in relation to the introduction of export duty on 1-3-2007. The Tribunal held that since the assessment was done before the duty imposition date, subsequent changes in duty rates were irrelevant. Consequently, the Tribunal ruled in favor of the respondents, determining no additional duty liability beyond what was assessed before the duty introduction date.

Issue 2: Interpretation of relevant provisions of the Customs Act

The judgment analyzed Sections 16 and 51 of the Customs Act to determine the applicable duty rate for export goods. Section 16 specifies that the duty rate for export goods is based on the date of the proper officer's order permitting clearance and loading for exportation under Section 51. Section 51 outlines the process after filing a shipping bill, where the proper officer ensures goods are not prohibited and duty is paid before permitting clearance and loading for export. In this case, the Tribunal emphasized that the duty assessment and payment were completed before the introduction of export duty on 1-3-2007. As a result, the duty liability was determined based on the date of the order under Section 51, making subsequent duty rate changes inconsequential to the already assessed duty.

Issue 3: Validity of the order passed by the Customs, Excise and Service Tax Appellate Tribunal

The High Court reviewed the Tribunal's decision and upheld its findings, concluding that the Tribunal's interpretation of the Customs Act provisions was correct. The Court agreed that the duty liability should be determined based on the date of the order permitting clearance and loading for exportation, as stipulated in Section 16. Since the duty assessment was completed before the duty imposition date, the subsequent changes in duty rates did not affect the already assessed duty amount. Therefore, the Court dismissed the department's appeal, affirming the Tribunal's decision in favor of the respondents. The appeal was dismissed with no order as to costs.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing the importance of the timing of duty assessment and payment in relation to the introduction of duty rates. The judgment clarified the application of relevant provisions of the Customs Act in determining export duty liability and highlighted that duty liability is fixed based on the date of the order permitting clearance and loading for exportation.