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TMI Blog2024 (8) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... % max P 0.045% max S 0.03% max B. Moisture 10% Max C. PHYSICAL COMPOSITION (ON NATURAL BASIS) 0 mm to 10 mm Above 10 mm: 5% max Below 15o micron: 25% max" 2.1. As per Article 7 of the said contract, the price of Iron Ore Fines are fixed at USD 51.00 (per Dry Metric Tonne) FOB ST Paradeep Port, India based on Fe 61%. 2.2. Article 10 of the said contract provides for adjustment of the unit price based on the actual Fe content, moisture and other chemical/physical specifications which are arrived at based on the load port certificate of analysis. 3. During the relevant period, Iron Ore Fines having a Ferrous (Fe) content below 58% were subject to 'nil' rate of export duty under Notification No. 15/2016-Customs dated 01.03.2016. If the Fe content was 58% or more but below 62%, the same were chargeable to export duty @ 30% on FOB value. Since the percentage of Fe, moisture and other chemical/physical specifications could not be ascertained at the time of export, the appellant declared in the shipping bill provisional values in respect of Fe, moisture content and other chemical/physical specifications. In the shipping bill, provisional values for moisture content fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Notification No. 15/2016-Customs dated 01.03.2016. If Fe content is 58% or more and below 62%, they are chargeable to export duty at the rate of 30% on FOB value. (iii) The contract value should be determined on Dry Metric Tonne (DMT) basis. However, the rate of duty is to be determined on the basis of percentage of Fe content in the total quantity of material brought for export including moisture, i.e., on 'as presented' basis (Wet Metric Tonne basis), as per Orders of the Hon'ble Apex Court and Circular issued by the C.B.E.C. (iv) In Dry Metric Tonne (DMT) basis, Fe content in the total mass is determined after expelling all the moisture and heating up to 105 degrees Centigrade for 2 hours. In Wet Metric Tonne (WMT) basis, Fe content is determined as a percentage of total matter, including moisture, contained in the sample. DMT basis invariably shows a higher percentage, thereby pushing the duly payable to a higher rate band which has happened in this case. 7. The Ld. Commissioner (Appeals) examined the issue and held that the ld. adjudicating authority had rightly assessed the shipping bill and duty had rightly been demanded from the appellant, vide the impugned order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lkata) wherein this Tribunal held that the classification is to be determined on the basis of Fe content on Wet Metric Tonne basis by deducting the moisture content given in the test report and thereafter, to convert the percentage of Fe at Dry Metric Tonne (DMT) basis to percentage of Fe on Wet Metric Tonne (WMT) basis by applying the universally recognized formula for determination of classification of Iron Ore Fines for export. The formula is: - Iron content = Fe x (100-M) / 100 (on as received basis) Where Fe is percentage of iron content on dry basis, M is moisture content in the sample 12.2. The said decision has been considered by this Tribunal in the case of Narbheram Vishram v. Commissioner of C.G.S.T. and Central Excise and Customs, Bhubaneswar vide Final Order No. 76372 of 2024 dated 19.07.2024 in Customs Appeal No. 76073 of 2018 (CESTAT, Kolkata) wherein this Tribunal, after examining the issue, observed as under: - "6.4. We observe that 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 v. Commissioner of Customs (Port), Kolkata and Commissioner of Customs (Preventive), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the Customs Authorities arrived at a manifestly erroneous conclusion that cannot be sustained, as they were bound to consider; all the relevant circumstances ". ii) In the case of Mineral Enterprises Ltd. Vs CC Mangalore - 2010 (253) ELT 241 (Tri. - Bang.), the Tribunal has explained that the departmental chemist has reported the goods 64.6% on moisture free basis whereas the export was in moist condition. Report submitted by exporter stating Fe content as 63.00% is accepted. (No further Appeal) iii) Similarly, while determining the rate of duty under Notification No. 62/2007-Cus Dt. 3.5.2007, the Tribunal in the case of CC (Port) Kolkata Vs Sesa Goa Ltd. - 2014 (310) ELT915 (Tri.-Kol.) has observed[ Para 5] "On a plain reading of the said Notification, it is clear that the conditions, in which the goods are exported, become relevant in determining Fe content; for application of the said Notification". (No further Appeal). iv) The same issue was again agitated before the Tribunal, Hyderabad Bench in the case of General Nice Mineral Resources (I) P. Ltd. Versus C.C. Vijayawada- 2017 (352) E.L.T. 94 (Tri. - Hyd.). The court reiterated Para 3 of Board Circular No. 4/2012- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersally recognised and followed for determination of Iron content in natural iron fines. 9.5 If the above formula is applied, in both the above cases under appeal, the Fe content of Iron Ore Fines exported on WMT basis would be more than 55% but less than 58% and hence would fall under CTSH 2601 11 42 as per the Tariff structure of the relevant period and would attract Nil rate of duty in terms of Notification No.27/2011-Cus Dt.1-3-2011 (Sl.No.20A) as amended by Notification No.15/2016-Cus Dt.01.03.2016. 9.6 The Ld. Commissioner (Appeals) have only focussed on the valuation of the Iron Ore Fines, which is not in dispute. Here, classification of Iron Ore Fines exported and how the Fe %age is to be determined (as the classification is based on Fe content), is the question which the Commissioner (Appeals) have not addressed in their Orders. Therefore, the Orders in Appeal are not legal, proper and correct. 9.7 Meanwhile, with effect from 1.5.2022, by a Supplementary Note to Chapter 26, inserted in Indian Customs Tariff, it has been stipulated that in relation to the products under the heading 2601 the percentage of Fe (Iron) content wherever specified shall be calculated on dry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaken within a period of three months from today. 64. Rules is made absolute in the above terms, No costs". Signed - BHARAT P. DESHPANDE, J. G.S. KULKARANI, J." 9.10 The Assessing Officer for the impugned Shipping Bills have adopted the Test Report of Griffith India Pvt. Ltd. as it provides details of all types of impurities including moisture, even though they said report is arrived at on DMT basis. 10. In view of the above discussions, we pass the following orders : i) direct the assessing officers to determine Fe content on WMT basis by deducting the moisture given in the test reports of NABL accredited government approved Private Laboratory ; ii) convert the %age of Fe on DMT basis to %age of Fe on WMT basis by applying the universally recognised formula for determination of classification of IOF exported. The formula is :- Iron content = Fe x (100-M) / 100 (on as received basis) Where Fe is % age of iron content on dry basis, M is moisture content in the sample. iii) finalise the assessments accordingly. 11. Accordingly, the impugned orders are set aside and the appeals are allowed with consequential relief, if any, as per law." 6.5. Regarding the & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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