2016 (11) TMI 1747 - AT - Customs

Confiscation of the iron ore consignments - imposition of redemption fine under Section 25 of the Customs Act 1962 - penalties under Section 114(i) ibid - HELD THAT - The Board vide Circular No. 4/2012-Cus. dated 17-2-2012 in the wake of several references received inter alia clarified In light of the observation by the Apex Court that export duty is chargeable according to Fe contents and to maintain uniformity all over the customs houses it is clarified that for the purpose of charging of export duty the assessment of Iron ore for determination of Fe contents shall be made on Wet Metric Ton (WMT) basis which in other words mean deducting the weight of impurities (inclusive of moisture) out of the total weight/Gross Weight to arrive at Net Fe contents. In the light of the Board s Circular the issue now stands gone in favour of the appellant - The impugned order is not sustainable and liable to be set aside - Appeal allowed.

Summary

Issues:
Appeal regarding export of Fe fines with higher Fe content than declared, applicability of FTP 2007-08 restrictions, confiscation, redemption fine, penalties under Customs Act, 1962.

Analysis:
The appeal in question pertains to the export of Fe fines by the appellant exporters, where the chemical test revealed a Fe content exceeding the declared percentage. The Department contended that such consignments, with Fe content over 64%, fell under the restricted category as per the FTP 2007-08 and should only be exported through specific state trading enterprises. Consequently, the adjudicating authority ordered the confiscation of the iron ore consignments, imposed a redemption fine under Section 25 of the Customs Act, 1962, and levied penalties under Section 114(i) of the same Act, leading to the initiation of this appeal. During the hearing, the appellant did not appear, and the matter was concluded after the Assistant Commissioner (AR) presented arguments and the records were examined.

The Board issued Circular No. 4/2012-Cus. on 17-2-2012 to address various concerns and provide clarification. The circular highlighted the assessment of Iron ore for determining Fe contents on a Wet Metric Ton (WMT) basis, which involves deducting the weight of impurities, including moisture, from the total weight to ascertain the Net Fe contents. It further stated that if difficulties arise in determining the net Fe content, assessment could be based on test results directly indicating the Fe contents. The circular emphasized that pending assessments should be finalized according to these guidelines to ensure uniformity across customs houses. It was clarified that drawing samples and conducting tests on a dry basis, rather than the Wet Metric Ton basis, may not yield accurate percentages for FTP purposes.

The Assistant Commissioner (AR) acknowledged the relevance of the Board's Circular discussed above during the proceedings. Considering the directives outlined in the circular, the issue was deemed to favor the appellant. Consequently, the impugned order was deemed unsustainable and set aside by the tribunal. The appeal was allowed, with any consequential reliefs granted as necessary.

This detailed analysis of the judgment highlights the key issues surrounding the export of Fe fines, the regulatory framework under the FTP 2007-08, the application of Customs Act, 1962 provisions, and the pivotal role of the Board's Circular in resolving the matter in favor of the appellant.