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2024 (7) TMI 1080 - AT - CustomsRefund of excess custom duty paid - the Fe content on DMT basis was below 62% and custom duty should be calculated at the rate of Rs. 50/- PMT instead of Rs. 300/- PMT - HELD THAT - The appellant got a contract dated 01.10.2007 to export 15,000 MT of Iron Ore fines to China. Accordingly, they filed two shipping bills for the export of 15,000 MT of iron ore. The load port analysis report showed the Fe content as 63.22% on DMT basis. Accordingly, both the shipping bills dated 26.11.2007 filed by the appellant for export of 15,000 MT of iron ore were assessed provisionally and the appellant paid export duty at the rate of Rs. 300/- per MT along with applicable cess as per the Customs Tariff Act. It is observed that after the decision of the Hon ble Supreme Court in the case of UNION OF INDIA VERSUS GANGADHAR NARSINGDAS AGGARWAL 1995 (8) TMI 73 - SUPREME COURT , the Board issued Customs Circular No. 04/2012-Cus dated 17.02.2012, wherein it was directed to complete all pending assessments considering Fe content on Wet Metric Ton (WMT) basis. We also observe that Notification No.62/2007-Customs dated 03.05.2007 was issued, wherein it has been notified that Fe content below 62% will attract customs duty at the rate of Rs. 50 PMT. The issue is no more res integra in the view of the decisions of the Tribunal, Kolkata in the case of M/S BAGADIYA BROTHERS PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA AND COMMISSIONER OF CUSTOMS (PREVENTIVE) , BHUBANESWAR 2023 (9) TMI 827 - CESTAT KOLKATA pronounced on 15 September 2023 wherein on a similar issue, this Tribunal has held that 'Fe' content is to be determined on WMT basis and duty has to be charged on such basis. A perusal of the Certificate indicates that the percentage of 'Fe' content in the iron ore exported is 58.61%, which is less than 62%. As per Notification No.62/2007-Customs dated 03.05.2007, when the Fe content is below 62%, the customs duty payable on the iron ore exported is at the rate of Rs. 50/- per MT. Accordingly, the appellant is liable to pay customs duty @ Rs.50/- per MT for the iron ore exported vide the above said two shipping bills. As the appellant has already paid customs duty @ Rs.300/- per MT, the appellant is eligible for refund of excess customs duty paid at the time of export. The impugned order as well as the Finalisation order dated 10.02.2017 is set aside - matter remanded back to the adjudicating authority to finalise the provisional assessment. Upon finalisation, the appellant is eligible for the refund of the excess duty paid at the time of export - appeal disposed off by way of remand.
Issues Involved:
1. Determination of Iron (Fe) content for export duty calculation: Dry Metric Ton (DMT) basis vs. Wet Metric Ton (WMT) basis. 2. Refund of excess customs duty paid by the appellant. Detailed Analysis: Issue 1: Determination of Iron (Fe) Content for Export Duty Calculation: DMT vs. WMT Basis The Appellant, engaged in the export of Iron Ore fines, filed two shipping bills for exporting 16,000 MT of iron ore to China. The load port analysis report showed the "Fe" content as 63.22% on DMT basis. The shipping bills were provisionally assessed, and export duty was paid at Rs. 300/- per MT considering the "Fe" content on DMT basis. The appellant argued that the duty should be assessed on WMT basis, referencing the Hon'ble Supreme Court's decision in Union of India v. Gangadhar Narsingdas Aggarwal [1997 (89) E.L.T. 19 (SC)] and Customs Circular No. 04/2012-Cus dated 17.02.2012, which directed the assessment of iron ore fines on WMT basis. The appellant contended that the "Fe" content on WMT basis was below 62%, which should attract a lower duty rate of Rs. 50/- per MT as per Notification No.62/2007-Customs dated 03.05.2007. The Tribunal observed that the Ld. Deputy Commissioner had finalized the shipping bills on DMT basis, contrary to the Supreme Court's decision and the Board's circular, which mandated assessment on WMT basis. The Tribunal reiterated that the goods must be assessed in the form and manner they are presented for assessment, emphasizing that iron content for charging export duty should be determined on WMT basis. Issue 2: Refund of Excess Customs Duty Paid by the Appellant The appellant sought a refund of excess customs duty paid, arguing that the "Fe" content on DMT basis was below 62%, and thus, the duty should be Rs. 50/- per MT instead of Rs. 300/- per MT. The Ld. Commissioner (Appeals) rejected the appeal due to the non-availability of CRCL test reports and certificates from authorized inspection agencies showing "Fe" content on WMT basis. The Tribunal noted that the issue was no longer res integra, referencing various judgments, including M/s. Bagadiya Brothers Private Limited v. Commissioner of Customs (Port), Kolkata [2023 (9) TMI 827 - CESTAT KOLKATA], which held that "Fe" content should be determined on WMT basis. The Tribunal also cited the Hon'ble High Court of Bombay's decision in V.M. Salgaocar and Brother Pvt. Ltd. v. The Assistant Commissioner of Customs (Export) [2022 (9) TMI 1306], which universally recognized the method of determining iron content on WMT basis. The Tribunal concluded that the appellant was entitled to a refund of the excess customs duty paid, as the "Fe" content on WMT basis was certified to be 58.61%, which is less than 62%. Therefore, the customs duty should be Rs. 50/- per MT. Conclusion: The Tribunal set aside the impugned order and the Finalisation order dated 10.02.2017, remanding the matter back to the adjudicating authority to finalize the provisional assessment on WMT basis. The appellant was deemed eligible for a refund of the excess duty paid at the time of export. Order Pronounced: The appeal was disposed of on the above terms, with the order pronounced in the open court on 19.07.2024.
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