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2024 (8) TMI 161 - AT - CustomsChallenge to assessment of the shipping bill - determination of Fe content of the Iron Ore Fines, for deciding the classification and rate of duty payable - Fe percentage of Iron Ore Fines is to be determined on Dry Metric Tonne (DMT) basis or Wet Metric Tonne (WMT) basis? HELD THAT - The said issue has been examined by this Tribunal in the case of M/S BAGADIYA BROTHERS PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA AND COMMISSIONER OF CUSTOMS (PREVENTIVE) , BHUBANESWAR 2023 (9) TMI 827 - CESTAT KOLKATA wherein this Tribunal held that the classification is to be determined on the basis of Fe content on Wet Metric Tonne basis by deducting the moisture content given in the test report and thereafter, to convert the percentage of Fe at Dry Metric Tonne (DMT) basis to percentage of Fe on Wet Metric Tonne (WMT) basis by applying the universally recognized formula for determination of classification of Iron Ore Fines for export. In the present case, since as per the certificate produced by the appellant the percentage of Fe content works out to less than 58%, therefore, in terms of Notification No. 15/2016-Cus. dated 01.03.2016, when Fe content is below 58%, the appellant is not liable to pay export duty on the exported goods. The impugned order as well as the order of finalization of the shipping bill set aside - matter remanded back to the adjudicating authority for finalization of provisional assessment. Upon finalization, excess duty, if any, paid by the appellant shall be refunded to them within one month of finalization of such assessment. Appeal allowed by way of remand.
Issues Involved:
1. Basis for determining Fe content in Iron Ore Fines for export duty classification. 2. Compliance with relevant notifications and circulars regarding export duty. 3. Correct method for calculating Fe content (Dry Metric Tonne vs. Wet Metric Tonne). Issue-wise Detailed Analysis: 1. Basis for determining Fe content in Iron Ore Fines for export duty classification: The appellant challenged the assessment of their shipping bill based on the Fe content of Iron Ore Fines. The dispute centered on whether the Fe content should be determined on a Dry Metric Tonne (DMT) basis or a Wet Metric Tonne (WMT) basis. The Tribunal referred to the precedent set by the Hon'ble Supreme Court in Union of India v. Gangadhar Narsingdas Aggarwal [1997 (89) E.L.T. 19 (S.C.)], which mandated that the classification of Iron Ore Fines should be based on the Fe content on a WMT basis, i.e., as presented for export, including moisture. 2. Compliance with relevant notifications and circulars regarding export duty: The appellant argued that the authorities did not comply with C.B.E.C. Circular No. 04/2012-Cus. dated 17.02.2012, which stipulates that for charging export duty, the assessment of Iron Ore should be on a WMT basis. The Tribunal noted that the authorities had overlooked this circular and other judicial pronouncements that required the Fe content to be determined on a WMT basis. 3. Correct method for calculating Fe content (Dry Metric Tonne vs. Wet Metric Tonne): The Tribunal emphasized that the Fe content should be calculated on a WMT basis by deducting the moisture content from the total weight. The universally recognized formula for this calculation is: Iron content = Fe x (100-M) / 100, where Fe is the percentage of iron content on a dry basis, and M is the moisture content in the sample. The Tribunal cited several cases, including Bagadiya Brothers Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata, and Narbheram Vishram v. Commissioner of C.G.S.T. and Central Excise and Customs, Bhubaneswar, which supported this method. Conclusion: The Tribunal concluded that the Fe content should be determined on a WMT basis, and the appellant's goods should be classified accordingly. Since the Fe content on a WMT basis was found to be below 58%, the appellant was entitled to exemption from export duty under Notification No. 15/2016-Cus. dated 01.03.2016. The Tribunal set aside the impugned order and directed the adjudicating authority to finalize the provisional assessment based on the WMT basis and refund any excess duty paid by the appellant within one month of finalization. Order Pronounced: (Order pronounced in the open court on 02.08.2024)
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