2015 (12) TMI 579 - AT - Customs

Provisional assessment - Refund of excess export duty - Held that - Purchase contract entered between the parties has prescribed that payment shall be made on the basis of DMT quantity of the goods. It is an admitted fact that the duty has been paid by the appellant on WMT basis, without deducting the moisture content. Thus, I am of the opinion that the goods actually not exported, should not suffer the duty liability, and accordingly, the excess paid duty will be eligible for refund. Further, I find that the contract entered into between the parties clearly stipulates that duty or tax levied in the country of origin shall be to the account of the seller, which evidently demonstrates the fact that the incidence of duty has not been transferred to the overseas buyer and the same has been borne by the appellant. Upon verification of the Chartered Accountant also certified that the incidence of Customs Duty has not been inbuilt in the selling price and has not been passed on to any other person. Therefore, considering the above, I am of the prima facie view that the operation of the impugned order can be stayed in the interest of justice.

Summary

Issues:
Stay of operation of Order-in-Appeal Nos. 451 to 456/2013-Cus. (B) passed by the Commissioner of Customs (Appeals), Bangalore.

Analysis:
The appellant, an exporter of 'Iron ore fines,' filed applications seeking a stay of the impugned orders due to an observation that they are entitled to a refund of excess Customs Duty paid. The duty was paid on the basis of Wet Metric Tons (WMT), while the overseas buyers made payments based on Dry Metric Tons (DMT). The jurisdictional Assistant Commissioner sanctioned the refund, which was challenged by the department before the Commissioner (Appeals). The Commissioner's decision favored the department, leading to the present appeals and stay applications by the appellant.

During the hearing, it was revealed that the purchase contract specified payment based on DMT quantity, whereas duty was paid by the appellant on a WMT basis without deducting moisture content. The judge opined that goods not actually exported should not bear duty liability, making the excess paid duty eligible for a refund. The contract also indicated that the duty in the country of origin was to be borne by the seller, showing that the duty incidence was not transferred to the overseas buyer. The Chartered Accountant confirmed that the Customs Duty was not included in the selling price and was not passed on to any other party. Consequently, the judge decided to stay the operation of the impugned order in the interest of justice until the appeals are disposed of.

Therefore, the Appellate Tribunal CESTAT BANGALORE, through Shri S.K. Mohanty, Member (J), granted a stay of the operation of the Order-in-Appeal, allowing the appellant to await the final decision on the appeals.