2020 (4) TMI 246 - AT - Customs

Export of iron ore fines with Fe content claimed to be less than 62% - benefit of N/N. 62/2007-CUS dated 03.05.2007 - HELD THAT - To ascertain the Fe content so as to extend the benefit of said exemption notification, sample was drawn and tested in the Customs Laboratory, Visakhapatnam, where its Fe content was reported as 62.67%. The said sample was retested at the CRCL, New Delhi to ascertain its Fe content, when the case was remanded by the Hon ble Andhra Pradesh High Court, while disposing the writ petition filed by the appellant challenging the initial test report. In the retest also the Fe content of the iron ore fines was found to be more than 62%. Needless to emphasize the samples drawn by the department had been in accordance with the procedure prescribed under the Customs Act and the Rules made thereunder; also in the presence of both the parties i.e., department as well as the representative of the appellant, whereas the samples drawn by the appellant and tested in private laboratory was without the knowledge or presence of the departmental officer. Hence, test report of the said samples cannot be relied upon against the test report of the Government laboratories. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Entitlement to benefit of exemption notification on export of iron ore fines with Fe content claimed to be less than 62%.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Customs, Central Excise. The case involved the export of Iron Ore Fines by the appellants, who declared Fe content between 61% to 61.5% to claim exemption under notification No. 62/2007-CUS. Initial test report by the department showed Fe content as 62.7%, leading to a demand for differential duty. The High Court directed retesting, which again confirmed Fe content above 62%. The appellant argued that the private test report, obtained unilaterally, should prevail over the government lab reports. However, the Tribunal cited the principle established by the Supreme Court in Reliance Cellulose case, emphasizing the reliability of government lab reports over private ones due to procedural compliance and presence of both parties during sample collection.

The key issue for determination was whether the appellants were entitled to the exemption notification based on the Fe content of the iron ore fines. The Tribunal considered the procedure followed for sample collection and testing, highlighting that samples drawn by the department were in accordance with Customs Act procedures and in the presence of both parties, unlike the samples tested privately by the appellant. Citing the Supreme Court's stance on reliance on government lab reports over private ones, the Tribunal upheld the impugned order, dismissing the appeal for lack of merit.

In conclusion, the Tribunal upheld the denial of benefit under the exemption notification to the appellants based on the Fe content of the iron ore fines as determined by government lab reports. The decision rested on the procedural compliance and reliability of government lab tests over private tests, as established by the Supreme Court precedent in the Reliance Cellulose case. The appeal was dismissed, affirming the assessment of differential duty based on the Fe content reported by the government laboratories.