2012 (11) TMI 124 - HC - Customs

Export of Iron Ore fines declaring iron content below 62% - alleged that exporter declared the iron content of the exported Iron Ore fines was 62% and below and the test revealed 62.1%, the authorities came to the conclusion that the exporter has misdeclared the iron content at the time of export and short paid export duty Held that - Difference in the iron content is hardly 0.1% - difference which sought to be made out is hardly 0.1%. If a provision is made for human error this 0.1% is negligent - That does not disclose that the assessee has disclosed the Iron content wrongly with the intention to evade payment on duty in favor of assessee

Issues:
1. Appeal against the order passed by CESTAT.
2. Discrepancy in iron content declaration for exported Iron Ore fines.
3. Dispute over test results and misdeclaration of iron content.
4. Commissioner's decision not to send the sample for re-testing.
5. Tribunal's decision to remit the matter for fresh decision.
6. Revenue's application for modification of the Tribunal's order.
7. Justification of the Tribunal's order and dismissal of the appeal.

Analysis:

1. The appeal was filed by the revenue challenging the CESTAT's order that declined to review the earlier decision remanding the matter to the Commissioner for a fresh decision after testing a sample of the consignment. The CESTAT found the Commissioner's order to be in violation of natural justice and instructed retesting by CRCL, New Delhi.

2. The dispute arose when the iron content of the exported Iron Ore fines was found to be 62.1% instead of the declared 62% or below. This led the authorities to conclude that there was a misdeclaration to evade custom duty, resulting in a show cause notice for the payment of the differential duty of Rs. 55 lakhs.

3. The assessee contested the claim, citing discrepancies in the test results conducted by the Chemical Examiner at Cochin compared to the in-house and SGS India Pvt. Ltd. laboratories' findings. The sample sent for re-testing to CRCL, New Delhi was damaged in transit, leading to the Commissioner's decision not to send it for re-testing.

4. The Commissioner's decision not to retest the damaged sample was challenged by the assessee before the Tribunal, which found the decision to be against natural justice and remanded the matter for fresh decision after retesting the consignment sample by CRCL, New Delhi.

5. The revenue's subsequent application for modification of the Tribunal's order was dismissed, leading to the appeal before the High Court. The Court considered the negligible difference in iron content, the procedural errors in handling the sample, and the lack of justification for not allowing retesting.

6. The High Court upheld the Tribunal's decision, emphasizing the need for fair proceedings, proper testing, and consideration of both revenue and assessee interests. The Court found no justification to interfere with the Tribunal's order and dismissed the appeal, highlighting the importance of upholding natural justice principles in such matters.

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