2013 (2) TMI 341 - AT - Customs

Revision u/s 130 - Show-cause notice u/s 28 - Assessee has exported a consignment of iron ore on payment of export duty @ Rs.50/- per M.T. by availing the benefit of Notification No.62/2007 Cus. Dt. 03/05/2007 - Assessment of the relevant shipping bill was provisional against execution of a bond and production of a bank guarantee by the exporter - A sample of the goods drawn for analysis by the Chemical Examiner was reported to have contained 62.10 % of Fe by weight - As iron ore containing more than 62% Fe by weight attracted the normal rate of export duty @ Rs.300/- per M.T. - The assessment was finalized on this basis without grant of the benefit of the above Notification - show-cause notice was issued to the respondent demanding differential duty of Rs.55 lakhs - A duplicate sample of the goods was sent to the Central Revenues Control Laboratory (CRCL), for re-testing for iron content - The CRCL s report showed Fe content to be 59.4% and moisture content to be 0.32% - Commissioner dropped the proposals raised in the show-cause notice Held that - Following the decision in case of JAIN SHUDH VANASPATI LTD.(1996 (8) TMI 108 - SUPREME COURT OF INDIA) show-cause notice u/s 28 could have been issued unless and until the order passed under Section 47 had been first revised under Section 130 of the Act. The issuance of the show-cause notice under Section 28 of the Customs Act was in order and the order passed in adjudication thereof by the learned Commissioner is also in order. Decides against revenue

Summary

Issues:
- Provisional assessment of export duty based on iron ore content
- Demand of differential duty and penalty for mis-declaration
- Validity of show-cause notice under Section 28 of the Customs Act
- Applicability of Notification No.62/2007 Cus. Dt. 03/05/2007
- Compliance with legal procedures for assessment and appeals

Provisional Assessment of Export Duty:
The respondent exported iron ore under a provisional assessment against a bond and bank guarantee. A sample showed 62.1% Fe content, triggering a higher export duty rate. The assessment was finalized based on this, leading to a demand for differential duty. However, a subsequent analysis by CRCL revealed a lower Fe content of 59.4% and moisture content of 0.32%, prompting the Commissioner to drop the demand.

Demand of Differential Duty and Penalty:
The Department issued a show-cause notice demanding differential duty and penalty for mis-declaration of Fe content. The appellant argued that the finalized assessment should have been appealed instead of issuing the notice. The Tribunal rejected this argument, citing the Supreme Court's ruling in UOI vs. Jain Shudh Vanaspati Ltd., which upheld the validity of issuing show-cause notices under Section 28 without revising the finalized assessment under Section 130.

Validity of Show-Cause Notice:
The Tribunal emphasized that the issuance of the show-cause notice under Section 28 was in accordance with the law, and the Commissioner's adjudication order was deemed valid. The appellant's contention that the respondent should have appealed the finalized assessment was dismissed, as it contradicted established legal precedents and the apex court's ruling.

Applicability of Notification No.62/2007 Cus. Dt. 03/05/2007:
The case involved the interpretation and application of Notification No.62/2007 Cus., which provided for a specific export duty rate for iron ore. The dispute arose due to the differing Fe content in the samples analyzed, impacting the duty rate applicable to the export consignment.

Compliance with Legal Procedures for Assessment and Appeals:
The judgment highlighted the importance of following legal procedures for assessment and appeals under the Customs Act. It underscored the necessity of adhering to established legal principles and precedents, as demonstrated by the Tribunal's consistent application of the Supreme Court's ruling in similar cases. Ultimately, the appeal was dismissed, affirming the validity of the show-cause notice and the Commissioner's decision.