2009 (5) TMI 444 - AT - Customs

Duty drawback- The appellants exported iron ore. At the time of export, they produced the analysis certificate indicating the percentage of Fe in the iron ore. It was 61.45%. In terms of the Notification No. 62/2007 dated 3-5-2007, the appellants were entitled for concessional rate of export duty. Held that- we are of the view that the certificate produced by the reputed laboratory should be accepted. This issue is also covered in favour of the assessee vide this Bench judgment in the case of Alpine International v. CC, Mangalore, In these circumstances, we allow the appeal with consequential relief.

Summary

Issues:
1. Violation of Principles of Natural Justice in denying retest of sample.
2. Acceptance of test results from a reputed laboratory over Chemical Examiner's report.
3. Applicability of concessional rate of export duty based on Fe content in iron ore.

Issue 1: Violation of Principles of Natural Justice in denying retest of sample
The appellants exported iron ore with Fe content of 61.45%, entitling them to a concessional rate of export duty. However, the Chemical Examiner's test showed 62.6% Fe content, leading to a demand for differential duty. The appellants argued that their request for a retest was denied, thus violating the Principles of Natural Justice. The advocate highlighted instances where retests favored the assessee. The departmental representative contended that there was no valid ground for a retest. The Tribunal, after careful consideration, found that the certificate from the reputed laboratory should be accepted, especially considering the potential variation in Fe content due to evaporation. The Tribunal referenced a previous judgment supporting the acceptance of the laboratory certificate, ultimately allowing the appeal with consequential relief.

Issue 2: Acceptance of test results from a reputed laboratory over Chemical Examiner's report
The key consideration was whether to accept the test results from a reputed laboratory or the Chemical Examiner's report. The Tribunal noted that the Fe content in iron ore can vary due to factors like evaporation, leading to inconsistencies in test results over time. In this case, the Tribunal decided to give precedence to the certificate from the reputed laboratory that was produced at the time of export, rather than the later Chemical Examiner's report. By doing so, the Tribunal upheld the principle of consistency and reliability in accepting test results, ultimately ruling in favor of the appellant based on this reasoning.

Issue 3: Applicability of concessional rate of export duty based on Fe content in iron ore
The dispute also revolved around the applicability of the concessional rate of export duty, which was contingent on the Fe content in the exported iron ore. The appellants met the required Fe percentage for the concessional rate at the time of export, as indicated by the laboratory certificate. Despite the subsequent test by the Chemical Examiner showing a slightly higher Fe content, the Tribunal held that the initial certificate should be accepted. By aligning with the previous Bench judgment and considering the practical implications of variations in Fe content, the Tribunal concluded that the appellants were entitled to the concessional rate of export duty. This decision reinforced the importance of adhering to the conditions specified for duty concessions based on the accurate determination of Fe content in exported goods.