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Issues involved: Interpretation of iron content for duty calculation under Customs Act.
The Supreme Court considered a case where the Government had issued Notifications exempting certain iron ore fines and lumpy iron ore from excess duty when exported. The dispute centered around whether the iron content percentage should be determined after ignoring moisture or considering all impurities including moisture. The Revenue argued for the former method, while the assessees advocated for the latter approach. The High Court ruled in favor of the assessees, a decision upheld by the Division Bench, leading to the appeals before the Supreme Court. The Revenue contended that the iron content in iron ore should be determined by first eliminating moisture and other impurities, in line with standard methods used by Chemical Analysts. They argued that the iron content percentage must be calculated from the total weight available at the time, as duty is based on weight. The Court agreed with the High Court's view that considering moisture in determining iron content is essential for accurate duty calculation, as excluding moisture would not reflect the true iron content in the weighed lumpy iron ore. The Court found the High Court's interpretation to be correct and declined to intervene, stating that even if different views were possible, the High Court's decision was reasonable. In conclusion, the Supreme Court dismissed the appeals, upholding the High Court's decision regarding the method of determining iron content for duty calculation. The Court mentioned that the question of refund would be addressed as per the law, where applicable.
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