2013 (10) TMI 855 - AT - Customs

Differential Duty Waiver of Pre-deposit - Whether the department was correct in demanding differential duty on lumps on the ground that the total quantity of Iron and Ore Fines exported by the appellant in three Shipping Bills can be charged duty at higher rate on the ground that the percentage of lumps is more than 5% - Revenue was of the view that 5% tolerance is allowed as per the practice followed in Goa Customs House Held that - The reason that 5% tolerance was allowed as per practice followed by the Goa Custom House, there is no other ground for charging differential duty on lumps in excess of 5% - The issue requires more detailed consideration taking into account the statutory provisions and basis for the same etc. which can be done at the time of final hearing stage - On the rejection of transaction value, even the documents based on such conclusions have been arrived were not provided to the appellant - It also requires a detailed consideration - the issues involved and taking into account the fact that the amount involved is very small and also taking into account the fact that the company is a small exporter and have financial hardships - the requirement of pre-deposit has to be waived - waiver of pre-deposit and stay of recovery in respect of the dues during the pendency of the appeals was allowed Stay granted.

Summary

Issues:
1. Differential duty on lumps exceeding 5% in Iron and Ore Fines export.
2. Rejection of transaction value in favor of contemporaneous prices.
3. Classification of FOB price as cum-duty price.

Analysis:
1. The first issue in the judgment concerns the demand for a higher duty on lumps in Iron and Ore Fines export, exceeding the 5% tolerance limit. The Revenue claimed that the appellant should pay duty on the differential quantity of lumps based on the practice followed in Goa Customs House. The Tribunal noted that apart from the 5% tolerance ground, there was no other basis for charging the differential duty. They emphasized the need for a detailed consideration of statutory provisions and other factors during the final hearing stage, indicating that this issue requires further examination.

2. The second issue revolves around the rejection of the transaction value in one Shipping Bill in favor of contemporaneous prices of Iron and Ore Fines. The Tribunal highlighted that the transaction value was rejected based on the comparison with contemporaneous prices, which were significantly higher than the price declared by the appellant. The Tribunal acknowledged the need for a detailed assessment of the documents supporting this conclusion, which were not provided to the appellant. Considering the arguable nature of this issue and the small amount involved, the Tribunal granted a waiver of pre-deposit and a stay of recovery during the appeal process.

3. The third issue pertains to whether the FOB price should be treated as a cum-duty price. The Tribunal noted that this issue was sub judice and pending before the Supreme Court. They suggested waiting for a final decision on this matter. Given the financial hardships faced by the small exporter appellant and the small amount in question, the Tribunal deemed it appropriate to waive the requirement of pre-deposit and stay the recovery of the adjudged dues during the appeal proceedings.

In conclusion, the judgment addressed the issues of demanding higher duty on lumps, rejecting transaction value in favor of contemporaneous prices, and classifying the FOB price. The Tribunal emphasized the need for detailed consideration of statutory provisions and supporting documents, while also considering the financial circumstances of the appellant in granting a waiver of pre-deposit and stay of recovery during the appeal process.