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TMI Blog2024 (12) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... d all the officers to follow such procedure. In the present case, we observe that the goods were exported in moist form whereas the report of the CRCL, Kolkata is apparently for the dry form. Thus, it is observed that the report of CRCL is not relevant to this case. This Bench, in many of the matters including the matter of M/s. Vedanta Ltd. [ 2023 (8) TMI 947 - CESTAT KOLKATA ], have concluded that for carrying out the Final Fe contents, the sample should be drawn and tested as early as possible. In the present case, if the number of days taken by CRCL and the number of days taken by the NABL accredited Private Labs are considered, then the Test Report issued by the NABL accredited agency will prevail over the CRCL report as they have taken less number of days than CRCL. The C.B.I.C. has also directed vide Circular No. 12/2014 dated 17.11.2014, the Transaction value is to be decided based on the load port test report or discharge port test report, as per terms of contract, where the proper officer shall compare the two reports as per the terms set out in the contract and finalize the provisionally assessed shipping bills, under the provisions of Section 14 of the Act and the Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Before shipment, samples were drawn by Customs officials, which was sent to the Deputy Chief Chemist Chemical Laboratory Customs House, Kolkata-700001 ( CRCL for short) for testing. Based on the Test Report received from the CRCL, the Department issued the Show Cause Notice demanding export duty @30% of FoB on the ground that in both the cases, the Fe content was more than 58% in DMT, whereas the Respondent-Company claimed that in all these cases, the Fe content was less than 58%, in DMT as well as in WMT. 2.1. After due process, the assessment was finalized by the Assistant Commissioner of Customs, Gopalpur Customs Division, Arjeepalli, Chattrapur, Odisha 761020, vide Order-in-Original No. CUS/GCD/AC/118/SB/111 Dated 08.10.2021, demanding Export Duty @30%. 2.2. On appeal, the Ld. Commissioner (Appeals), Bhubaneshwar, vide the impugned order, has allowed the Appeal filed by the appellant (Respondent herein) on the ground that there is substantial delay of more than one month in testing the samples by CRCL and since the moisture content in Iron ore is prone to evaporation, the delay in testing resulted in evaporation of moisture content. Therefore, the Ld. Commissioner (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on both the buyer and the seller and thus it becomes the basis of Final Invoice for Fe contents, moisture and other impurities, weight, etc., and other adjustments as required to be made for Bonus and penalties, etc., for arriving final price in respect of both the shipping bills. 5.1. It is further submitted that in the present case, the Final Invoice has been issued based on Load Port Report issued by Mitra SK which has been accepted by the buyer and is the basis on which export remittance has been made and received, duly supported by Bank Realisation Certificate and a Certificate issued by an Independent Chartered Accountant. He submitted in this regard that the Final Invoice Price and value of Final Invoice had been arrived at on the basis of Fe content @57.14% on DMT basis i.e., below 58%, which has never been objected to by Department. Accordingly, he submitted that proposing levy of Export duty by treating Fe contents as more than 58%, on the basis of CRCL report, would be contradictory to the terms contained in the contract, as the export proceeds were paid for Fe contents below 58%. 5.1. The Final Invoice issued on the Load Port Test Report, having Fe contents and mois ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2013 ors. = 2024 (6) LCX 0074-CESTAT, Hyderabad] iv. Kutch Salt Allied Industries Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos. A/30223-30224/2024 dated 01.04.2024 in Customs Appeal No. 21505 of 2015 CESTAT, Hyderabad] v. Moorgate Industries (I) Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata [Final Order No. 77639 of 2023 dated 30.11.2023 in Customs Appeal No. 75506 of 2023 CESTAT, Kolkata] vi. Terapanth Foods Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos.A/30231-30232/2024 dated 05.04.2024 in Customs Appeal No. 22188 of 2015 CESTAT, Hyderabad] 6. Heard both sides and perused the appeal documents. 7. We observe that the question to be answered by us in this case is as to whether the CRCL Report is required to be considered for the purpose of Final Assessment of the Exported Iron Ore Fines. Accordingly, the issue to be decided is whether the Export Duty can be levied based on the test report of the Chemical Examiner of CRCL or not, when the Final Invoice / realised price is arrived at on the basis of the test report of a NABL Accredited Agency at Load Port or CIQ Report at Discharge Port or any other formula, as per the terms and condition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced by an amendment which is brought about w.e.f. 1st May 2022 7.4. We observe that the following orders on this issue also supports the case of the Respondent: - i. Vedanta Ltd. v. Commissioner of Customs (Prev.), Bhubaneswar [Final Order No. 76352 of 2023 dated 18.08.2023 in Customs Appeal No. 79383 of 2018 CESTAT, Kolkata] ii. Bagadiya Brothers Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata [Final Order Nos. 76644-76645 of 2023 dated 15.09.2023 in Customs Appeal No. 75008 of 2021 anr. CESTAT, Kolkata] iii. Bonai Industrial Co. Ltd. ors. v. Commissioner of Customs, Visakhapatnam [Final Order Nos. A/30317-30324/2024 dated 21.06.2024 in Customs Appeal No. 25364 of 2013 ors. = 2024 (6) LCX 0074-CESTAT, Hyderabad] iv. Kutch Salt Allied Industries Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos. A/30223-30224/2024 dated 01.04.2024 in Customs Appeal No. 21505 of 2015 CESTAT, Hyderabad] v. Moorgate Industries (I) Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata [Final Order No. 77639 of 2023 dated 30.11.2023 in Customs Appeal No. 75506 of 2023 CESTAT, Kolkata] vi. Terapanth Foods Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos. A/30231-30232/2024 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.04.2024 in Customs Appeal No. 21505 of 2015 CESTAT, Hyderabad] reported in (2024) 19 Centax 72 (Tri.-Hyd.). The relevant part of the said decision is reproduced below :- 19. To examine this re-determination in the impugned order, we need to examine as to what is transaction value. Transaction value is the price paid or payable by the importer (buyer) to the exporter (seller) as a consideration for the goods which are exported. It is negotiated and agreed to by them in the contract. Nobody else, including the Customs officers have any role in deciding the transaction value because they are strangers to the contract. It determines the rights and liabilities between the buyer and seller . If the transaction value is contingent upon certain other factors as per the contract between them, it will have to be determined accordingly. Nobody else who is not a party to the contract, including the Customs officers have any right to add or delete or modify the conditions of the contract. (Emphasis supplied) 8. As regards the reports of CRCL, Kolkata, we observe that, in Shipping Bill No. 9152539 dated 06.03.2021, the Fe content in WMT is below 58%. In such a case, as per Notification No. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accepted. We also observe that the issue is covered in favour of the Respondent in the cases of Alpine International v. Commissioner of Customs, Mangalore [2008 (224) E.L.T. 331 (Tri.-Bang.)], Mineral Enterprises Ltd. Vs Commissioner of Customs, Mangalore [2010 (253) E.L.T. 241 (Tri.-Bang.)] and General Nice Mineral Resources (I) P. Ltd. Vs Commissioner of Customs, Vijayawada [2017 (352) E.L.T. 94 (Tri. Hyd.)]. 9. We further observe that as per Section 14 of the Customs Act the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods. The paid or payable amount has to be derived or arrived based on terms of contract with Foreign Buyer; accordingly, the transaction value of exported Iron Ore Fines shall be the amount realised from the Foreign Buyer as per terms of agreement. The Final Invoice against both the Shipping Bills has been issued based on Test Report issued by Mitra S.K. Private Ltd., for the Fe contents @57.56 in Dry Metric Ton i.e. DMT and @51.97% in Wet Metric Ton. The same is as per the terms and condition of agreement for which the Department has not raised any dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement. Accordingly, we find that Load Port Test Report / Test Certificate in the present case would be the decisive factor for the determination of the iron content in the export product. This stand is substantiated by the fact that the remittance has also been received in proportion thereof only. Accordingly, the Fe contents of 57.56% in DMT as per Test Report of Load Port i.e., below 58%, is required to be honoured, which is the basis on which the price payable or paid had been arrived, Final Invoice is issued and export remittances are received i.e., Transaction Value under Section 14 of the Customs Act for the exported Iron Ore Fines. We observe that the Customs officers cannot change this transaction value or the stipulation of the test report of Mitra S.K. Pvt. Ltd., being the determinant of the transaction value. 10. In view of the above discussions, we are of the view that the report of Chemical examiner, CRCL, Kolkata cannot be used for deciding and levy of Export Duty. Thus, we do not find any infirmity in the impugned order of the Ld. Commissioner Appeals, rejecting the Order in Original for determining the Export Duty on the basis of the CRCL test report. 11. We fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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