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2024 (12) TMI 888 - AT - CustomsRequirement to consider CRCL Report for the purpose of Final Assessment of the Exported Iron Ore Fines - levy of Export Duty based on the test report of the Chemical Examiner of CRCL - Final Invoice / realised price is arrived at on the basis of the test report of a NABL Accredited Agency at Load Port or CIQ Report at Discharge Port or any other formula - HELD THAT - This Tribunal has already decided in various cases that the Fe content, till the amendment made w.e.f. 1st May 2022 vide the Finance Act 2022, is required to be calculated in WET basis by following the principles of law as laid down by the Hon'ble High Court at Bombay in the case of Union of India v. Gangadhar Narsingdas Agrawal Anr. 1986 (4) TMI 71 - HIGH COURT OF BOMBAY , which has been affirmed by the Hon ble Apex Court 1995 (8) TMI 73 - SUPREME COURT . The C.B.I.C., vide Circular No. 04/2012-Cus. dated 17.02.2012, accepted the same and directed all the officers to follow such procedure. In the present case, we observe that the goods were exported in moist form whereas the report of the CRCL, Kolkata is apparently for the dry form. Thus, it is observed that the report of CRCL is not relevant to this case. This Bench, in many of the matters including the matter of M/s. Vedanta Ltd. 2023 (8) TMI 947 - CESTAT KOLKATA , have concluded that for carrying out the Final Fe contents, the sample should be drawn and tested as early as possible. In the present case, if the number of days taken by CRCL and the number of days taken by the NABL accredited Private Labs are considered, then the Test Report issued by the NABL accredited agency will prevail over the CRCL report as they have taken less number of days than CRCL. The C.B.I.C. has also directed vide Circular No. 12/2014 dated 17.11.2014, the Transaction value is to be decided based on the load port test report or discharge port test report, as per terms of contract, where the proper officer shall compare the two reports as per the terms set out in the contract and finalize the provisionally assessed shipping bills, under the provisions of Section 14 of the Act and the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 duly, supported by Bank Realisation Certificates for the purposes of comparison with the final invoices. The valuation of Exported Iron Ore Fines has to be derived based on terms of contract with Foreign Buyer and as per the Contractual agreement. Accordingly, it is found that Load Port Test Report / Test Certificate in the present case would be the decisive factor for the determination of the iron content in the export product - the Customs officers cannot change the transaction value or the stipulation of the test report of Mitra S.K. Pvt. Ltd., being the determinant of the transaction value. The report of Chemical examiner, CRCL, Kolkata cannot be used for deciding and levy of Export Duty. Thus, there are no infirmity in the impugned order of the Ld. Commissioner Appeals, rejecting the Order in Original for determining the Export Duty on the basis of the CRCL test report - there is no allegation of fraud or mis-declaration made out in the facts of the present case. As per Section 14 of the Customs Act, the value of export goods shall be the transaction value i.e., the price actually paid or payable for the goods when sold from India for delivery at the time and place of exportation (FOB Value). There are no legal substance in the Order in Original of the Assistant Commissioner, and hold that there is no infirmity in the impugned order passed by the Ld. Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is devoid of any merits and liable to be dismissed - appeal of Revenue dismissed.
Issues Involved:
1. Whether the CRCL report should be considered for the final assessment of the exported Iron Ore Fines. 2. Whether the export duty can be levied based on the CRCL report despite the final invoice being based on the NABL accredited agency's report. 3. Whether the moisture content and delay in testing affect the determination of the Fe content and export duty. 4. Whether the transaction value should be based on the Load Port test report as per the terms of the contract. Issue-wise Detailed Analysis: 1. Consideration of CRCL Report for Final Assessment: The central issue was whether the CRCL report should be used for the final assessment of the exported Iron Ore Fines. The Tribunal observed that the CRCL report was not relevant as it was based on dry form testing, whereas the goods were exported in moist form. The Tribunal noted that the Fe content should be calculated on a wet basis, following the principles laid down by the Supreme Court in Gangadhar Narsingdas Agrawal's case, which mandates considering the condition in which goods are exported. The Tribunal concluded that the CRCL report, which was delayed and did not account for moisture content, could not be used for final assessment. 2. Levy of Export Duty Based on CRCL Report: The Tribunal examined whether export duty could be levied based on the CRCL report when the final invoice was based on the NABL accredited agency's report. It was noted that the final invoice was issued based on the Load Port report by Mitra S.K. Pvt. Ltd., which was accepted by the buyer and formed the basis for export remittance. The Tribunal emphasized that the transaction value, as per Section 14 of the Customs Act, should be the price actually paid or payable, which in this case was based on the Load Port report. Therefore, the Tribunal held that levying export duty based on the CRCL report would contradict the terms of the contract. 3. Impact of Moisture Content and Delay in Testing: The Tribunal addressed the issue of moisture content and delay in testing, which affected the determination of Fe content. It was observed that the delay in testing by CRCL led to evaporation of moisture, resulting in higher Fe content readings. The Tribunal highlighted that the Load Port report, issued closer to the date of sampling, provided a more accurate representation of Fe content. The Tribunal also noted that the CBIC Circular No. 12/2014 emphasized the importance of considering the Load Port report for assessment, which was not adhered to by the Revenue. 4. Transaction Value Based on Load Port Test Report: The Tribunal analyzed whether the transaction value should be based on the Load Port test report as per the contract terms. It was observed that the contract specified that the Load Port test report results would be final for determining Fe content and other impurities for the final invoice. The Tribunal concluded that the Load Port report should be the decisive factor for determining the Fe content, as it aligned with the contract terms and the remittance received. The Tribunal reiterated that customs officers could not alter the transaction value determined by the Load Port report. Conclusion: The Tribunal upheld the order of the Commissioner (Appeals), rejecting the Order in Original that determined export duty based on the CRCL report. It was concluded that the appeal filed by the Revenue lacked merit and was dismissed. The Tribunal emphasized the importance of adhering to the transaction value based on the Load Port report and the terms of the contract, in line with the legal principles and circulars issued by the CBIC.
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