9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (8) TMI 1525 - AT - CustomsClassification of Iron Ore Fines (IOF) - rate of export duty - Undervaluation - Artificially splitting of consignments to evade higher customs duties - Show cause notices issued demanding differential customs duty - Uniform Customs procedure - determination of Fe contents - Dry Metric Ton (DMT) basis or Wet Metric Ton (WMT) basis - Imposition of penalty under Section 114AA - HELD THAT - In these set of facts IOF Fe content is to be determined on WMT basis as held by the Hon ble Bombay High Court in the case of V.M. Salgaocar Vs. The Assistant Commissioner of Customs (Export) Goa 2022 (9) TMI 1306 - BOMBAY HIGH COURT . The said decision has been provided by this Tribunal in the case of M/s. Bagadiya Brothers Pvt. Ltd Vs. Commissioner of Customs (Port) Calcutta Commissioner of Customs of Bhubaneshwar 2023 (9) TMI 827 - CESTAT KOLKATA wherein this Tribunal observed as under held that The issue stands decided as early as 1997 by Hon ble Supreme Court in the case of Union of India Vs Gangadhar Narsingdas Aggarwal 1995 (8) TMI 73 - SUPREME COURT and subsequent CBEC Circular No. 4/2012- Cus dated 17.12.2012 which was issued for adoption of uniform Customs procedure in all Customs Houses. In the said Circular it was stipulated that for the purpose of charging of export duty the assessment of Iron ore determination of Fe contents is required to be made on Wet Metric Ton (WMT) basis which in other words mean deducting the weight of all impurities (inclusive of moisture) out of the total weight/Gross Weight to arrive at Net Fe contents. Thus By following the decisions and Board Circular cited above We hold that the Fe content is to be calculated on the basis of WMT and the Fe content is calculated on WMT basis same for 5 consignment involved. Following the order of M/s. Global Associates Vs. Commissioner of Customs (Preventive) Bhubaneshwar we hold that the consignment are required to be considered as consolidated consignments and in all the consignments the Fe content is less than 58%. In that circumstances the Respondent are not required to pay any duty. With regard to observation made by the Ld. Adjudicating Authority with respect to shipping bill no. 6005016 dated 11th May 2017 is contrary to the observations made by the Adjudicating Authority in the impugned order. Therefore the said observation made by the Adjudicating Authority is bad in law and not sustainable. Therefore we hold that in all the 5 consignment which has been splitted into 13 consignments the Respondent is not liable to pay any export duty. Therefore no demand is sustainable against the Respondent. As there is no demand of duty sustainable against the Respondent consequently no penalty can be imposed on the Respondent under Section 114AA of the Customs Act 1962. Accordingly the appeals filed by the revenue are dismissed and cross objection filed by the Respondents are allowed with consequential benefit if any.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Classification of IOF Based on Fe Content Relevant Legal Framework and Precedents: The classification of iron ore fines for customs duty purposes is determined by the Fe content. High-grade IOF (Fe > 58%) attracts a higher duty rate of 30%, whereas low-grade IOF (Fe <= 58%) attracts a lower or no duty. Court's Interpretation and Reasoning: The Tribunal examined the classification of the IOF consignments as presented in the shipping bills and the corresponding Fe content. The Tribunal emphasized the importance of accurate classification based on the Fe content, as this directly affects the applicable duty rate. Key Evidence and Findings: The Tribunal reviewed the shipping bills and the Fe content data provided by the respondent. It was noted that the respondent had filed shipping bills for both high-grade and low-grade IOF, with duties paid accordingly. Application of Law to Facts: The Tribunal applied the customs classification rules to the facts of the case, focusing on whether the consignments were correctly declared and whether the duties paid matched the declared Fe content. Treatment of Competing Arguments: The respondent argued that the consignments were correctly classified and duties were paid as per the Fe content. The Revenue contended that the respondent split the consignments to avoid higher duties. The Tribunal assessed the validity of these arguments against the evidence. Conclusions: The Tribunal found that the classification of consignments based on Fe content was a central issue and required precise determination to ascertain the correct duty liability. Alleged Artificial Splitting of Consignments Relevant Legal Framework and Precedents: Artificial splitting of consignments to evade customs duties is prohibited under customs law. The burden of proof lies with the Revenue to establish that such splitting occurred. Court's Interpretation and Reasoning: The Tribunal analyzed whether the respondent's actions constituted artificial splitting. It considered the sequence of shipping bills, the timing of exports, and the consistency of the declared Fe content. Key Evidence and Findings: The Revenue's investigation suggested that the respondent exported high-grade IOF by splitting them into multiple shipping bills to reduce duty liability. The Tribunal scrutinized the evidence provided by the Revenue, including the shipping bill records and the Fe content analysis. Application of Law to Facts: The Tribunal evaluated whether the evidence supported the allegation of artificial splitting, considering the respondent's documentation and the Revenue's investigative findings. Treatment of Competing Arguments: The respondent denied any wrongdoing, asserting that the shipping bills were filed based on genuine business needs and not to evade duties. The Revenue argued that the pattern of shipping bill filings indicated an intent to split consignments artificially. Conclusions: The Tribunal concluded that the evidence did not conclusively prove artificial splitting by the respondent, emphasizing the need for clear and convincing evidence to support such allegations. Justification of Differential Duty Demand Relevant Legal Framework and Precedents: The demand for differential duty arises when there is a discrepancy between the duty paid and the duty applicable based on the correct classification of goods. Court's Interpretation and Reasoning: The Tribunal assessed whether the differential duty demanded by the Revenue was justified given the classification and Fe content of the IOF consignments. Key Evidence and Findings: The Tribunal reviewed the calculations and basis for the differential duty demand, examining the consistency of the Revenue's claims with the shipping bill data and Fe content reports. Application of Law to Facts: The Tribunal applied the principles of customs duty calculation to the facts, determining whether the respondent's duty payments aligned with the legally required amounts. Treatment of Competing Arguments: The respondent contested the differential duty demand, arguing that the duties were paid correctly based on the declared Fe content. The Revenue maintained that the demand was justified due to misclassification. Conclusions: The Tribunal found that the differential duty demand was not substantiated by sufficient evidence of misclassification or artificial splitting, leading to the conclusion that the demand was unjustified. Procedural and Evidentiary Standards Relevant Legal Framework and Precedents: The burden of proof in customs duty disputes lies with the Revenue to establish misclassification or evasion. Procedural fairness and adherence to evidentiary standards are crucial. Court's Interpretation and Reasoning:
|
