2007 (12) TMI 87 - AT - Customs

Iron ore confiscated on basis of test reports of samples because as per report iron content in the iron ore was 65.5%. assessee at the time of export submitted a certificate issued to the effect that the content of Fe in the ore was 62.90% which was well within the limit of 64% - there is chance of evaporation of moisture & a test conducted after lapse of 6 months time, would not give the same iron content which was found at the time of export- Revenue s allegation is not justified

Summary

Issues:
1. Appeal against OIO No. 04/07 dated 17-5-2007 passed by the Commissioner of Customs, Mangalore regarding export of iron ore exceeding the permissible Fe content under Exim Policy 2004-09.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore involved a dispute arising from the export of iron ore through Mangalore port. The appellants had submitted a certificate from SGS India Pvt. Ltd. indicating the iron content to be 62.90%, within the permissible limit of 64%. However, subsequent tests conducted by the Chemical Examiners Cochin Custom House revealed the iron content to be 65.5%, leading to allegations of violation of the Exim Policy. The Commissioner of Customs held the goods liable for confiscation under Section 113 of the Customs Act, imposing a redemption fine of Rs.6 lakhs and a penalty of Rs.1 lakh under Section 114 of the Customs Act, 1962.

During the hearing, the appellants argued that the delay between the export and testing allowed for moisture evaporation, potentially affecting the iron content results. They also cited a relevant decision from the High Court of Judicial Commissioner (Goa, Daman & Diu) emphasizing the importance of determining iron content in moist iron ore, not just on a dry basis. The Tribunal noted the significant time gap between sample collection and testing, approximately six months, supporting the argument of potential moisture evaporation influencing the test results. Additionally, the Tribunal considered the credibility of the certificate provided by a reputable testing organization and found the absence of departmental officers during sample collection not sufficient to discredit the test results.

Upon careful consideration, the Tribunal concluded that the impugned order was not sustainable. Citing the likelihood of moisture evaporation affecting the iron content results and the relevance of the case law cited by the appellants, the Tribunal set aside the Commissioner's order, allowing the appeal with consequential relief. The judgment highlighted the importance of considering factors such as time elapsed between sample collection and testing, the credibility of testing certificates, and the impact of moisture evaporation on iron content results in cases involving export compliance under relevant policies and regulations.