2016 (11) TMI 226 - AT - Customs

Export of iron ore - enhanced rate of duty - let export order - assessee contended that enhanced duty would be applicable only to the material loaded after the duty was enhanced - AR argued that in all the cases let export order on the shipping bill has been given after the complete loading of the ship - Held that - following the decision of the Tribunal in the case of Kineta Minerals & Metals Ltd. 2009 2009 (1) TMI 272 - CESTAT, BANGALORE (Tribunal) the contentions of the exporter accepted - Revenue Appeal dismissed.

Summary

Issues Involved:
1. Interpretation of Section 16(1) and Section 51 of the Customs Act, 1962.
2. Applicability of enhanced duty rates on goods loaded before the issuance of the notification enhancing the duty.
3. Validity of multiple permissions for loading as separate let export orders under Section 51.

Detailed Analysis:

1. Interpretation of Section 16(1) and Section 51 of the Customs Act, 1962:
Section 16(1) of the Customs Act, 1962, specifies that the rate of duty and tariff valuation applicable to any export goods shall be the rate and valuation in force on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under Section 51. Section 51 allows the proper officer to permit clearance and loading of goods for exportation once satisfied that the goods are not prohibited and the exporter has paid the assessed duty and charges.

2. Applicability of Enhanced Duty Rates on Goods Loaded Before the Issuance of the Notification Enhancing the Duty:
The respondents argued that enhanced duty cannot be demanded on the material loaded on the ship before the enhancement of duty. The appellate authority allowed the benefit of lower duty on the material loaded before the enhancement of duty and granted consequential refunds. The Revenue contended that the enhanced duty rate should apply as the let export order was issued after the notification enhancing the duty was released.

The Tribunal examined the case of Narayan Bandekar & Sons Pvt. Ltd. where the Hon’ble High Court of Bombay held that the relevant date for determining the rate of duty is the date on which the let export order is issued, not the actual loading date. This was supported by the Tribunal's decision in Kineta Minerals & Metals Ltd., which clarified that the date of assessment of the shipping bill and the order permitting clearance and loading under Section 51 are crucial, not the actual loading date.

3. Validity of Multiple Permissions for Loading as Separate Let Export Orders under Section 51:
The respondents argued that permissions under Section 51 were granted daily during the physical loading process, implying that the rate of duty should apply separately for each day's loading. The Revenue countered that multiple clearances for loading were trade facilitation measures and did not constitute separate let export orders.

The Tribunal noted that each permission to load granted on the checklist of the shipping bill could be construed as a permission under Section 51. This interpretation was consistent with the decision in Kineta Minerals & Metals Ltd., where it was held that once an order under Section 51 is given, the relevant date for the rate of duty is the date of that order, and any subsequent changes in the duty rate are irrelevant.

Conclusion:
The Tribunal dismissed the appeals by the Revenue, affirming that the relevant date for determining the rate of duty under Section 16(1)(a) is the date on which the let export order is issued. Multiple permissions granted for loading on different dates can be considered valid permissions under Section 51, and the enhanced rate of duty applies only to consignments loaded after the notification enhancing the duty was issued. The decision of the Commissioner (Appeals) to allow the benefit of lower duty on material loaded before the enhancement was upheld.