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TMI Blog2022 (9) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of three issues, firstly, the classification of the iron ore under the Second Schedule of the Tariff Act to be undertaken based on the scheme of classification namely the headings and sub headings under the First Schedule to the Tariff Act, secondly, the classification under the First Schedule would enable determination of the appropriate sub headings of classification, which is based on the percentage of Fe (iron) content in the iron ore. This is the stage where the Wet method would be required to be adopted; thirdly, based on the appropriate classification (headings or sub headings), the appropriate prescribed basis of levy under the Second Schedule to the Tariff Act is required to be determined; and fourthly, it would be required to be examined whether there is applicable exemption notification related to either description of the goods and/or the classification (headings or sub headings) of the goods as regards the levy of export duty on the export of iron ore. There are much substance in the contention as urged on behalf of the petitioners that the Fe (iron) content of the iron ore was required to be determined at the second stage as noted above, to be undertaken on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han Shah with Mr. Srisabari Rajan and Ms. Neha Shirdokar, Advocates for the Petitioners. Ms. Asha Desai, Standing Counsel with Ms. Natasha Volvoikar, Advocate for Respondent No. 1. Mr. Pravin Faldessai, Deputy Solicitor General of India for Respondent Nos. 2 and 3. JUDGMENT : (Per G. S. Kulkarni, J.) 1. The judgment has been divided into the following sections to facilitate analysis:- SECTIONS HEADING PARA NOS. A PRELUDE 3 B PETITIONERS' CASE 6 C REVENUE'S REPLY AFFIDAVIT 15 D PETITIONERS' REJOINDER AFFIDAVIT 18 E SUBMISSIONS ON BEHALF OF THE PETITIONERS 21 F SUBMISSIONS ON BEHALF OF THE REVENUE 22 G DISCUSSION AND CONCLUSION 23 2. Rule. Respondents waive servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 12/15 April 2019; d. not act on or in consequence of the General Alert Circular No. 02/2019 dated 12/15 April 2019; e. assess the exports effected by the Petitioner No. 1 covered under the Impugned Order dated 17.03.2022 and the Impugned Order dated 31.03.2022 under CTH 2601 11 21, CTH 2601 11 22 and CTH 2601 11 41, as declared by the Petitioner No. 1, and confirm levy of 'Nil' rate of export duty under the Notification No. 27/2011-Cus. dated 1 March 2011, as amended. vii. Pending the hearing and final disposal of this Petition- a. stay the operation of the Impugned Order dated 17.03.2022 and the Impugned Order dated 31.03.2022; b. direct the officers of the Respondents not to act on or in consequence of the Impugned Order dated 17.03.2022 and the Impugned Order dated 31.03.2022; and c. direct the officers of the Respondents not to act on or in consequence of the General Alert Circular No. 02/2019 dated 12/15 April 2019; d. direct the Respondents not to encash the Bank Guarantees provided by the Petitioner No. 1 in the instant matter or take any other coercive action as a consequence of the Impugned Order dated 17.03.2022 and the Impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India. There is a levy of customs duties on the export of the iron ore, as classified in the First Schedule to the Customs Tariff Act, 1975, (for short, 'The Tariff Act' ) 'for the rates of export duty as prescribed under the Second Schedule of the Tariff Act. The following is the rate of duty in regard to iron ore lumps and iron ore fines: CHAPTER 26 Ores, slag and ash Tariff Item Description of goods Unit Rate of duty Standard Preferential Areas (1) (2) (3) (4) (5) 2601 IRON ORES AND CONCENTRATES, INCLUDING ROASTED IRON PYRITES - Iron ores and concentrates, other than roasted iron pyrites : 2601 11 - Non-agglomerated : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2601 11 50 -- Iron ore concentrate kg 10% - 2601 11 90 -- Others kg 10% - 2601 12 -- Agglomerated : 2601 12 10 -- Iron ore pellets kg 5% - 2601 12 90 -- Other kg 5% - 2601 20 00 - Roasted iron pyrites kg. 5% - The petitioners have classified that the iron ore/ore fines being exported by them under Tariff items 2601 11 21, 2601 11 22, 2601 11 41 and 2601 11 42. 7. The present petition concerns three shipping bills of March 2018 followed by two provisional shipping bills of June 2020 relating to export of iron ore, which were filed by the petitioners under CTH No. 2601 11 21 and CTH 260 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gdas Agarwal Ors. 1986 SCC OnLine Bom 506. In such decisions, the Courts throughout approved the Wet Metric Ton (WMT) method to determine the percentage of iron ore, which included taking into account all the impurities including moisture in the iron ore lump or fines, 10. The petitioners contend that the Assessing Officer, however, did not agree with the petitioners' case that the WMT method needs to be followed. The petitioners contend that the Assessing Officer applied the Dry Metric Ton (DMT) method on the basis that the levy of export duty was required to be made on ad valorem rates of duty. According to the petitioners, the Assessing Officer classified the petitioners' export by applying the Dry Metric Ton (DMT) method whereby the goods were classified under headings CTH 2601 11 29 and CTH 2601 11 49 and not under the headings CTH 2601 11 21 and CTH 2601 11 22. 11. It is the petitioners' case that the impugned orders-in-original as they apply the Dry Metric Ton method (DMT) are ex facie contrary to the law as laid down by the Supreme Court in Gangadhar Agarwal's case , as also they are contrary to the Revenue's own circular dated 17.02.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evy namely that the rate of export duty from 13.06.2008 being changed from the per ton rate basis to ad valorem basis. It is the petitioners case that such change in the rate of tariff is no justification so as to alter and/or nullify the norms as laid down by the Supreme Court in Gangadhar Agarwal's case which had found acceptance by the Revenue even after the amendment of the Second Schedule of the Tariff Act so as to prescribe levy of duty at the ad valorem rates w.e.f. 13.06.2008. 14. The petitioners have contended that the determination of Fe (iron) content on WMT basis was considered to be an acceptable norm in the prior assessments, which was clear from the fact that by virtue of the Finance Act 2022, for the first time an amendment to the First Schedule to the Tariff Act, has been incorporated by adding a supplementary note in Chapter 26 to the effect that for the products of CTH 2601, the percentage of Fe (iron) content wherever specified, shall be calculated on the 'Dry Metric Ton' (DMT) basis to be effective from 01.05.2022. Hence, according to the petitioners there could not have been any adoption of the DMT method in respect of any assessment for the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1493-1(1981), which is followed for the purpose of calculating the iron content. The Revenue has next contended that Section 14 of the Customs Act defines the value in case of export of goods as a transaction value of such goods. This was the reason that the value of the goods in all shipping bills relating to export of Iron Ores declared by the exporters is the value of goods arrived on Dry Metric Ton (DMT) basis. It is contended that in all shipping bills, the quantity of the goods as declared is the weight of the iron ore on dry basis. It is contended that also the unit price of the goods exported is as per DMT of iron ore exported. Therefore, the value of the goods which has been declared in the shipping bill is taken as the transaction value for the purpose of levy of export duty on DMT. It is contended that since the duty is chargeable on ad valorem basis, as the petitioners in their shipping bill have valued the said goods based on Dry (DMT) basis, hence, while calculating the applicability of duty, the petitioners cannot contend that the Fe (iron) content must be calculated on WMT basis and all these issues can be agitated by the petitioners before the Appellate Authority, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0%$ - ---- Iron ore fines (below 62% Fe) - 2601 11 41 ---- Below 55% Fe kg. 10%$ - 2601 11 42 ---- 55% Fe or more but below 58% Fe kg. 10%$ - 2601 11 43 ---- 58% Fe or more but below 60% Fe kg. 10%$ - 2601 11 49 ---- 60% Fe or more but below 62% Fe kg. 10%$ - Referring to the above Tariff items, it is stated that the classification of the goods, which is iron ore, can only be decided after arriving at the Fe (iron) content of the consignment. It is stated that the methodology to arrive at the Fe (iron) content, a sample has to be removed for determination of the moisture and the other impurities which are quantified only after testing the sample on DMT basis, as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the purpose of classification, the percentage of Fe (iron) content has to be considered as on the standard method of DMT basis. It is stated that however for the purpose of determining the percentage on the WMT basis, a formula was fixed in terms of the WMT analysis, the Fe (iron) content to be determined on as received basis/Wet basis/Natural basis which was being determined by not implying any technical test analysis, but was derived from the Fe (iron) content determined on such Dry (DMT) basis, by applying a simple arithmetical calculation under a formula. The Revenue has denied the case of the petitioners relying on several decisions to contend that none of the said decisions are applicable in the facts of the present case, inasmuch as, there is no contravention of any orders of any Courts or of the provisions of the Constitution of India or the CBIC circulars, while passing the impugned orders-in-original and the impugned GA Circular. On such contentions, it is prayed that the petition be dismissed. D. Petitioners' Rejoinder Affidavit: 18. There is a detailed rejoinder affidavit filed on behalf of the petitioners, inter alia, contending that in the reply/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Circular dated 17.02.2012. That the Revenue's apprehension that there is an efficacious remedy available to the petitioners is also misconceived as in the facts and circumstances of the case, a statutory appeal would not be an efficacious remedy. The other contents of the rejoinder/affidavit are not required to be discussed, suffice it to observe that, the petitioners have dealt with the reply/affidavit in detail in supporting the prayers as made in the petition contending that the petition needs to be allowed. E. Submissions on behalf of the Petitioners: 21. Mr. Shah, learned Counsel for the petitioner has made the following submissions. (i) The principal contention of Mr. Shah is that the basis for duty demand relevant for the assessment in question, necessarily ought to have been, as to what was laid down by the Supreme Court in Gangadhar Agarwal s case, which confirmed the view taken by the learned Single Judge of this Court and as confirmed by the Division Bench, namely that the export of iron ore was required to be assessed by the WMT method and not the Dry / DMT method. (ii) It is submitted that in passing the impugned orders-in- original the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (vi) It is submitted that the impugned General Alert Circular insofar as the adjudication of the duty demand is concerned is totally irrelevant apart from being illegal, for the reason that it is not a circular issued in exercise of the powers conferred under Section 151A of the Customs Act. It is also illegal as it deviates and/or nullifies the accepted norms of classification in regard to the determination of the percentage of iron ore, as per the decision of the Supreme Court in Gangadhar Agarwal's case. Thus, a circular which is totally alien to the adjudication, which has found an implied recognition in the orders-in- original being passed, is required to be held illegal and unconstitutional being violative of Articles 14, 19(1)(g), 21, 141 and 265 of the Constitution of India. (vii) It is submitted that the DRI could not have issued the General Alert Circular which would be in conflict with a circular issued under Section 151A of the Customs Act. For such a reason when an apparent conflict is brought about, it would be necessarily required to be held that the General Alert Circular is illegal and contrary to Section 151A of the Customs Act. It is submitted that to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thod has been introduced, hence, necessarily the regime prior to such amendment that is prior to 1 May 2022, only the WMT method was applicable. (xi) In supporting the above submissions Mr. Shah has placed reliance on the decision of the learned Single Judge of this Court in Gangadhar Narsingdas Agarwal Vs. A.C. Martins Others (supra) and the decision of the Division Bench of this Court in Union of India and others V/s Gangadhar Narsingdas Agarwal (supra), decision of the Supreme Court in Union of India v/s. Gangadhar Narsingdas Agarwal (supra), the decision of the learned Judicial Commissioner Goa, Diu and Daman in Sociedade De Fomento Industrial Pvt. Ltd. vs K.C. Lakiri And Another 1982 SCC Online GDD 5, Paper Products Limited V/s. Commissioner of Central Excise (1999) 7 SCC 84 and Pioneer Embroideries Ltd v/s. Commissioner of Customs, Mumbai (2020) 20 SCC 457 . F. Submissions on behalf of the Revenue: 22. On the other hand, Ms. Asha Desai, learned Counsel for the Revenue has made the following submissions:- (i) It is her preliminary submission that the petitioners have an alternate remedy available under the provision of Section 129-A of the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n) and it is in such context the rate of levy was considered by the Court accepting the WMT test. (v) Insofar as the circular dated 17/02/2012 is concerned, it is submitted that the circular is required to be read in its entirety and is mis-interpreted by the petitioners to contend that it interprets as to what was held by the Supreme Court in Gangadhar Agarwal s case. It is her submission relying on the extensive contentions as taken in the reply affidavit that even the Supreme Court had recognized the applicability of the ISI standards, which are now succeeded by the BIS norms. There is no other standard method acceptable to the Government of India for the determination of the iron ore content in the iron ore lumps/iron ore fines. The petitioners have also not suggested any alternative method. (vi) It is also her submission that the Finance Act, 2022 as referred by the petitioners is only clarificatory in nature, inasmuch as, what has been incorporated is only a clarification which in no manner whatsoever is in contradiction to what was applicable under the Customs Tariff Act read with the Schedule thereunder. It is submitted that even from a plain reading of the relevant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention of the petitioners is premised on the decision of the Supreme Court in Gangadhar Agarwal's case. As the plinth of the petitioner's case is on this decision of the Supreme Court it is imperative to note the very genesis of this case in some detail and how it stood concluded, travelling from two Benches in the Bombay High Court, and ultimately the Supreme Court. 28. Gangadhar approached the learned Single Judge of the Bombay High Court in proceedings under Article 226 of the Constitution (Miscellaneous Petition no.1120 of 1974) contending that he was engaged in the business of export of lumpy iron ore and iron ore fines. He contended that by notification dated 02.08.1966 item no.28 and 29 were introduced in the Second Schedule to the Indian Tariff Act, 1934 whereby customs duty @10% per metric ton was levied on the exports of lumpy iron ore and customs duty @Rs.5/- per metric ton on the export of iron ore fines. He contended that Government of India had issued a notification dated 24.07.1967 under the powers conferred under Section 25(1) of the Customs Act exempting iron ore fines falling under item 29 of the Second Schedule to the Indian Tariff Act, 1934 when exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by Italab (Goa) Pvt Ltd. On 02.09.1970. Gangadhar paid customs duty of an aggregate amount of Rs.3,17,599.84 in respect of exports between August 1970 to December 1972. The duty was paid on the basis that iron ore content was 62.38%. Such fact is significant, as the case unfolds. 31. Gangadhar contended that on the date of export of the lumpy iron ore and iron ore fines they were in a moist condition and it was not proper to determine the iron content in that condition. Such claim of Gangadhar was not disputed by the Customs Department. Gangadhar informed M/s Italab (Goa) Pvt. Ltd. and requested to give the percentage of iron contents on natural basis or in a moist condition. Italab (Goa) Pvt. Ltd. (Industrial Testing and Analytical Laboratory) which was a recognised Government laboratory informed Gangadhar by its letter dated 30.09.1971 that the iron content on natural basis was 57.23% in respect of the consignment exported by Gangadhar. On receipt of such letter Gangadhar filed several applications for refund of the excess duty paid by him. He filed an application on the ground that iron ore content on the date of the export was only 57.23% hence he had become entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scientific test to determine the iron contents in iron ore while in moist condition. The Revenue contended that every export is regulated by the provisions of the Customs Act and the rules framed thereunder relying on provisions of Section 17 of the Customs Act to submit that duties are levied on export of goods after the goods are examined and tested by the proper officer. It was contended that the petitioners had obtained a certificate from a recognized office of the Government Italab (Goa). Pvt. Ltd and such certificate unmistakably indicated that iron content was 62.38% and therefore recovery of duty was perfectly appropriate. This was not disputed on behalf of the petitioner Gangadhar. However, Gangadhar argued that the iron contents were mentioned in the certificate after analysis of sample dried at 105o C. He contended that the said certificate would not truly reflect the iron content in the exportable goods on the date of the export. The submission being that the contents of iron in a sample dried at 105o C is excessive than what is found in moist conditions. 34. In the above circumstances, the Court observed that the question which required an answer on the petition was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that it was undoubtedly true that the formula had no scientific backing and the formula was based on an approximate conclusion , however observing that it could not be ignored that the formula was recognized not only in our country, but also overseas. 37. The Court also did not accept the contention of the Revenue that the notification under which Gangadhar was making a refund claim was published, and it must hence be assumed that the Government had in mind that the iron content should be determined only after analysis of dry sample at 105o C and not the proportionate determination while in moist condition. The Court observed that from the material on record, it would have to be held that it is a recognized practice to determine the iron content in the moist condition on a proportionate basis by finding out the iron content in the dried sample analysis. The Court also recorded satisfaction from the letter dated 30.09.1971 issued by Italab Private Limited and letter dated 23.06.1978 of Pattinson Stead that it is a recognized practice to ascertain the iron content in the goods in moist condition. There was one more peculiarity, the Court also observed that Gangadhar had in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench are significant and are required to be noted:- 5. Now, the only submission urged by Mr. Rege, learned Counsel for the appellants was that it is not possible by a physical analysis to determine the iron ore contents in moist lumpy iron ore or moist iron ore fines, because such moist iron ore fines and moist lumpy iron ore has to be dried for finding out the iron contents. It was urged by him that this is the only method of analysis accepted by the Indian Standard Institute, and hence the result of that analysis must be made applicable directly or straightway to determine the percentage of iron contents in the iron ore exported by the petitioners. In our view, the submission has no merit whatever. Although it is true, as submitted by Mr. Rege, that moist lumpy iron ore and moist iron ore fines have to be dried for the purpose of determining the iron contents, there is a mathematical formula by which, on the basis of the results of these aforementioned analysis, the iron content in moist lumpy iron ore and moist iron ore fines can be easily determined. That formula has been in fact explained in a letter dated 23rd June 1978 addressed by Toman Trading Co. Ltd., a copy of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re called upon to determine the iron content in lumpy iron ore or iron ore fines. The Supreme Court in such context observed that it was immaterial what method one adopts for the purposes of separating the iron content from the lumpy iron ore, but the percentage had to be determined from the total weight which was available at the given point of time when the iron content was determined. That was because the duty was relatable to weight and therefore, once the iron content is determined keeping in mind the total weight, the percentage can be determined from the iron content from the rest of the impurities inclusive of moisture and thereafter, ascertain in which category the lumpy iron ore would fall for the purposes of charging duty under the aforesaid notifications. 41. The Supreme Court accordingly confirmed the view taken by High Court observing that if the content of the iron ore is determined after ignoring the moisture, the percentage would be relatable to the lumpy iron ore weight at the relevant point of time for the purposes of charging duty. The Supreme Court observed that even if two views were possible the view taken by the High Court being a plausible one would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout taking the moisture into consideration. This, he submitted, was the method which is normally employed under the ISI standard as well as by Chemical Analysts who are called upon to determine iron content in lumpy iron ore or iron ore fines. It is immaterial what method one adopts for the purposes of separating the iron content from the lumpy iron ore but the percentage has to be determined from the total weight which was available at the given point of time after the iron content is determined. That is because the duty is relatable to weight and, therefore, once the iron content is determined keeping in mind the total weight the percentage can be determined separating the iron content from the rest of the impurities inclusive of moisture and thereafter ascertain in which category the lumpy iron ore would fall for the purposes of charging duty under the aforesaid Notifications. This view which the learned Single Judge took and which came to be affirmed by the Division Bench of the High Court appears to us to be the correct view to take, for the reason that if the percentage of iron content is determined after ignoring the moisture the percentage would not be relatable to the lu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, then it cannot be accepted that the iron content cannot be determined while the goods are in moist condition. (v) It is not correct for the Revenue to take a position that as it is not possible by a physical analysis to determine the iron ore content in moist lumpy iron ore or moist iron ore fines, because moist iron ore fines and moist iron ore has to be dried for finding out the iron contents to be determined by the method of analysis extended by the Indian Standard Institute and the result of such analysis, by applying such method must be made applicable directly or straight away to determine the iron content in the iron ore being exported, as it is not the practice that lumpy iron ore and moist iron ore fines are dried for the purpose of determining the iron contents. (vi) Although it is true that there is a mathematical formula by which on the basis of the result of such analysis, the iron content in moist lumpy iron ore and moist iron ore fines, can be easily determined. Such formula is being regularly applied by the expert laboratories not only in India but also other countries. A certificate issued by such laboratories in regard to the iron content in the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation, which is based on the percentage of Fe (iron) content in the iron ore. This is the stage where the Wet method would be required to be adopted; thirdly, based on the appropriate classification (headings or sub headings), the appropriate prescribed basis of levy under the Second Schedule to the Tariff Act is required to be determined; and fourthly, it would be required to be examined whether there is applicable exemption notification related to either description of the goods and/or the classification (headings or sub headings) of the goods as regards the levy of export duty on the export of iron ore. 45. It appears to be not in dispute that during the period prior to 13 June 2008, the prescribed rate of levy was Rs.300/- per ton and post 13 June 2008, the prescribed rate of levy was 20% ad valorem, which was modified to 30% ad valorem. 46. We, therefore, find much substance in the contention as urged on behalf of the petitioners that the Fe (iron) content of the iron ore was required to be determined at the second stage as noted above, to be undertaken on the basis the iron ore as it naturally stood at the time of export, namely, on the Wet method as in such condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the form of the actual iron ore being exported. The export of the iron ore is in a natural form containing moisture and impurities. 48. The respondents thus could not have discarded the wet (WMT) method purporting to co-relate the same to the rate of levy namely, the tariff rate being changed which earlier was on a per ton basis to the ad valorem basis. On a comparison of the tariff headings as it stood earlier and at present which we have already noted above, there is no change whatsoever in the description of the goods except for a minor variation in the percentage of iron ore (Fe) classified in different categories. What has undergone a change is only the rate of the duty which, when the Courts decided in Gangadhar Agarwal's case, it was at a rate per ton basis and which has now been changed to an ad valorem duty. Except for such change, not only the classification but the basis of classification as appearing in the different headings and sub-headings appears to have remained the same. There is also no material placed on record by the Revenue to the effect that what was accepted to be an established practice in Gangadhar Agarwal's case, till the assessment in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (35% or more but below 40%) kg. 5% $ - 2602 00 50 -- Manganese ore (30% or more but below 35%) kg. 5% $ - 2602 00 60 -- Ferruginous (10% or more but below 30%) kg. 5% $ - 2602 00 70 -- Manganese ore sinters, agglomerated kg. 5% $ - 2602 00 90 -- Other kg. 5% $ - (emphasis added) 50. There is another factor which in our opinion would support the petitioners' contention namely that the wet (WMT) method was consistently followed even after the new regime on the ad valorem basis was introduced w.e.f. 13 June 2008 for all these years from the time the principles of law recognizing the Wet method, had found approval of the Supreme Court in Gangadhar Agarwal's case in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h context, the Revenue took a categorical stand before this Court that, the assessment would be undertaken without taking recourse to the GA Circular dated 12/15 April 2019. In the present case also, the order-in-original dated 17 March 2022 is in regard to the bills of the year 2018. This would be equally true in respect to the second order-in-original dated 22 March 2022 which pertains to the bills which are of the year 2020. Hence, such circular in no manner could be resorted in passing the orders-in- original or for that matter, such circular could not have been even impliedly applied as contended by the petitioners. We may also note the submission of Ms. Desai on the basis of what has been stated in paragraph 3 of the reply affidavit that the GA circular dated 12/15 April 2019, is an internal communication and administrative in nature and it is only advisory and not binding on the lower authorities of the department and that the impugned orders-in-original are passed on the available materials on record. She would not dispute that the GA Circular is not a circular issued under Section 151-A of the Customs Act providing for instructions to Officers of the Customs as issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed by us above, the change from the rate per metric ton being modified to ad valorem, in our opinion, has not brought about any change in the classification as insofar as determination of Fe(iron) content is concerned for the purpose of the levy of the export duty. Such change to introduce the dry method is brought about only w.e.f 1 May 2022 by the Finance Act, 2022. It cannot be that the peculiar (natural) form in which the goods are subjected to export would be ignored. 55. Ms. Desai's next submission that what would be relevant to be seen is that the contract itself is on Dry Metric Ton (DMT) and hence the contention of the petitioners that the duty should be on the Wet Metric Ton (WMT) is not well founded. It is clearly seen that this was the identical situation in Gangadhar Agarwal's case namely that the export duty was paid by Gangadhar on the Dry method and subsequently a refund application was made by him contending that the export of the iron ore being in the natural form, the Wet method ought to have been followed and such contention of Gangadhar was allowed by Single Judge as confirmed by the Division Bench and ultimately by the Supreme Court. Thus, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms, All Chief Commissioners of Central Excise, All Director Generals/Chief Departmental Representatives (CESTAT) All Commissioners of Customs, All Commissioners of Central Excise and All Commissioners of Central Excise Customs Sir/Madam, Subject : Adoption of uniform Customs Procedure for calculating the contents of Iron Ore clarification regarding. ********** Several references have been received in the Board highlighting divergent practices for calculation of iron contents from Iron Ore being followed at different Ports for charging Export duty. In this regard two types of calculation methods are being followed i.e. on the basis of Wet Metric Ton (WMT) and other on the basis of Dry Metric Ton (DMT). 2. Hon'ble Supreme Court in the matter of Civil Appeal no. 7539 of 1995 in case of Union of India Vs. Gangadhar Narsingdas Aggarwal [1997 (89) ELT 19(SC) in order to arrive at the Iron (Fe) contents out of Iron Ore, had held that- 'that is because the duty is relatable to weight and therefore, once the iron content is determined keeping in mind the total weight, the percentage can be determined separating the iron content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he clear position in law as laid down by the Supreme Court in Gangadhar Agarwal's case and the consistent practice being followed by the Revenue following such decision till the introduction of the recent amendment as brought about by the Finance Act, 2022. 59. Insofar as Ms. Desai's contention that the orders-in-original cannot be challenged before this Court in the present Writ Petition, when an alternate remedy is available to the petitioners under Section 129-A of the Customs Act, in our opinion, such contention in the facts and circumstances of the case, cannot be accepted in view of our conclusion that in passing the impugned orders the Revenue has acted in patent breach of the law as laid down of Supreme Court in Gangadhar Agarwal's case and its own circular dated 17 February 2012. Once, we have concluded that the impugned orders are illegal as also are rendered unconstitutional, on such count, we cannot accept the contention as urged on behalf of the Revenue that the petitioners would nonetheless be required to be directed to take recourse to an alternate remedy and the jurisdiction of this Court under Article 226 of the Constitution be not exercised. The law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the decisions in regard to the position in law on the binding force of the decisions of the Supreme Court are cited by Mr. Shah, we have thought it appropriate not to burden the judgment as these decisions reiterate the principles of law which are well settled, that decisions of the Supreme Court are binding on all Courts and authorities under Article 141 of the Constitution of India. Also the decisions as cited by Mr. Shah on the question that the circulars issued by the Board under Section 151-A would be binding, the position in law in that regard is also well established. 63. In the light of the above discussion, the petition is partly allowed in terms of the following directions : (i) Insofar as the assessments in relation to the period prior to 1st May 2022 are concerned, they shall be governed by the principles of law in regard to the classification as laid down by the Supreme Court in Union of India vs. Gangadhar Narsingdas Aggarwal (supra), as clarified by the communication dated 17 February 2012, of the Tariff unit of the Ministry of Finance Department of Revenue (CBEC) Customs-IV Division. (ii) The GA Circular no. 2/2019 dated 12/15 April 2019, being not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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