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TMI Blog2024 (8) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely, Haldia and Paradip. The details of the 13 Shipping Bills filed by the respondent have been encapsulated in the table hereunder Table No. 1 Sl. No. Ref No. Vessel Shipping Bill No. and date WMT (Quantity) Name of the Overseas Buyer Customs Duty Paid by the Appellant (Rs.) Differential Duty Demanded by the Department (Rs.) 1 1A MV Anarita 4403750 27.02.2017 13850 Trios Corporation Limited, Singapore 1,51,71,899 4,97,62,334 2 1B MV Anarita 4404046 27.02.2017 42783 0 3 2A AP Drzic 4951641 24.03.2017 11860 Global Minore Pte. Limited 1,37,23,562 4,24,47,654 4 2B AP Drzic 4951639 24.03.2017 40300 0 5 3A Pacific Pride 5932026 08.05.2017 7700 Bagadiya Brothers Singapore Pte. Limited 56,42,580 87,50,786 6 3B Pacific Pride 5932766 08.05.2017 2684 0 7 3C Pacific Pride 5932571 08.05.2017 9616 0 8 3D Pacific Pride 6005016 11.05.2017 18850 1,51,09,618 1,23,16,625 9 3E Pacific Pride 6001201 11.05.2017 19700 0 10 4A Jewel of Shinas 8626453 11.09.2017 38000 M/s KTP Exports Pte. Limited, Singapore 0 3,15,74,010 11 4B Jewel of Shinas 8626464 13.09.2017 17000 1,42,25,558 12 5A St. Cergue 1179674 28.11.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. Adjudicating Authority vide two Orders-In-Original bearing Nos 02/Commissioner/2024 dated 08 January 2024 and 03/Commissioner/2024 dated 18 January 2024 on the premise that the Fe Content of the aggregate/consolidated consignments exported through a single vessel was less than 58% on WMT basis after a thread bare analysis of the legal position concerning the subject issue. The Fe Content on the WMT Basis of the aggregate/consolidated consignment was computed as follows: Table No. 2 Consignment No. Table No. 1 Vessel Name WMT (Quantity) Fe Content on WMT Basis (percentage) Sl. No. Ref. No. 1 1,2 1A+1B MV Anarita 56633 54.79 2 3,4 2A+2B AP Drzic 51960 54.35 3 5,6,7,8,9 3A+3B+3C+3D+3E MV Pacific Pride 58550 56.53 4 10,11 5A+5B Jewel of Shinas 53139 56.02 5 12,13 6A+6B MV St. Cergue 59600 54.94 Further the charge with respect to undervaluation was also categorically dropped by the Ld. Adjudicating Authority in the favour of the respondent. In any event, when the FE content on WMT basis for all the 5 consignments is less than 58 there is no export duty in view of Notification No. 27/2011 - Cus. dated 01 March 2011. 2.4. Although the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the allegation in the Notices that a single consignment exported by a single vessel was being artificially split into multiple shipping bills and dropped the entire demand for differential duty on the premise that the Fe content of each of the 5 consignments exported through 5 vessels on a consolidated basis was less than 58% it could not have rendered an in-consistent and extraneous finding as regards the correctness of the duty paid with respect to shipping bill no. 6005016 dated 11 May 2017 on an isolated basis. " 6. The Respondent relied on the decision of this Tribunal in the case of M/s. Global Associates Vs. Commissioner of Customs (Preventive), Bhubaneshwar in Customs Appeal Bearing No. 75107 of 2020 vide final order no. 75227523/2022 dated 11th March, 2024. To say that the Fe content on WMT treating the whole consignment as one consignment. Therefore, the allegation of the Department is not sustainable and no Excise duty is payable. 7. It is his submission that in their own case, if the Fe content on WMT basis is computed on the basis of single consignment then the Fe content would come out less than 58%. Therefore, no export duty is payable by the appellant and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Commissioner of Customs (Appeals), Kolkata and Appeal No. C/75450/2023 has been filed against Order-in-Appeal No. 57- 58/CUS/CCP/2020 dated 31.12.2020 passed by Commissioner(Appeals), GST, CX and Customs, Bhubaneswar. 3. The facts of the case in brief are that the Commissioner of Customs (Appeals), Kolkata upheld the Order of Finalisation of Assessment of S/B No. 5114893 Dated 30.03.2017 by the Joint Commissioner of Customs(Export), Custom House, Kolkata, inter alia, on the following grounds : i) Load Port Test Report issued by Inspectorate Griffith India Pvt. Ltd. was adopted, discarding Test Report of Custom House Laboratory (CHLR) on the ground that it does not show impurities percentage which is vital for assessment and that various appellate authorities have observed that testing by Customs House Laboratories is not as per mandatory BIS standard and that acceptance of Customs Lab Report may result in lower Customs Duty; ii) For assessment , the Transaction Value on DMT price as per contract was accepted. iii) Duty was charged @ 30% Adv, since the Fe content was more than 58% as per Load Port Test Report (LPTR), which was determined on dry Metric Ton basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. The percentage of impurities is substantial. If the percentage of Fe is taken after deducting all quantity of impurities, percentage of Fe will be lower. Therefore, the rate of duty will be lower. The Supreme Court directed that "the percentage of Fe will be taken out of total material presented for export after deducting all the impurities including moisture. 1. This has been followed in the following judicial pronouncements : i) SOCIEDADE DE FOMENTO INDUSTRIAL PVT. LTD.- 1987 (30) E.L.T. 686 (Goa High Court) [Para 7] where similar view was taken as under : "The iron contents in the moist iron ore which was exported ought to have been calculated following the well-recognised international practice and the duty calculated on basis of the said iron contents in the moist ore exported. By ignoring the moisture contents in the exported 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue Control Lab, New Delhi who has opined vide his letter dated 22.01.2009 that the iron content in samples in received basis can be calculated from iron content on dry basis if the moisture content in the samples as received basis is known: 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. This method although not the best, was temporarily adopted by the department in previous orders on similar matters so as to meet the requirements of various judicial pronouncements." [we are attaching the order] 9.4 This method of determining Fe content in WMT is elaborately by discussed by Hon'ble High Court of Bombay in Para 47 of its judgement in WP No. 216/2022 in case of V M Salgaokar Brothers. The Court mentions that it is universally 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn 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 issued under Section 151-A of the Customs Act, same cannot form the basis of any assessment. III. In view of our above conclusion, we set aside the impugned orders-in-original dated 17 March 2022 and 13 March 2022 passed by the Assistant Commissioner of Customs. IV. We order a remand of the matter in both the cases to the Assistant Commissioner of Customs, who shall hear the petitioners and pass a fresh order in accordance with law, in the light of the principles of laws as discussed by us in this judgement. Such exercise shall be undertaken 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 moist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay duty on whole of the consignment @ 30% and differential duty was demanded. If the contention of the ld. adjudicating authority is considered and found to be correct, i.e. it is only one consignment. The Fe content is to be calculated based Wet MT and Dry MT as held by this Tribunal in the case of Jindal Steel & Power Ltd. (supra). Relevant paras of the order extracted below :- "15. We observe that iron ore with Fe content up to 58% is allowed to be exported duty free, while 30% export duty is chargeable on exports of iran ore of Fe content between 58% to 64%; and export of iron ore of Fe content above 64% is prohibited. In the following test reposts, the Fe content are reported at less than 58%. The details of the reports certifying the Fe content are asunder Sl. No. Name of the Lab/ Quality Control Fe Results 1. Office of the Deputy Director of Mines, while issuing the Transit Passes 56.14%- 56.56% 2. Pre-shipment quality test done at TCRC on 23.12.2020 56.87% 3. Pre-shipment quality test done at TCRC on 24.02.2021 56.72% 4. Report of Discharge Port dated 24.03.2021 56.70% 16. All other reports indicate that the Fe content was less than 58%. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duty has to be calculated on the basis of the goods being in such condition as they were in at the time of export, Thus, it is an undisputed position that the claim for partial exemption from customs duty made by the petitioners the present case has to be determined on the footing of the goods exported being moist iron ore fines and moist lumpy iron ores." 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 are fines, because suck moist iron ore fines and moist lampy 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 mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt)." 12. We find that if we take the contention of the department as correct that the appellant has artificially splitted one consignment into three Shipping Bills, in that case, the calculation to arrive at Fe content is as follows:- S/B No. & Date WMT Moisture Fe on DMT Fe on WMT 489268/22.03.2017 17117 6.9 57.67 53.69 4897267/22.03.2017 34000 6.29 66.33 59.35 5055344/28.03.2017 1143 6.29 63.33 59.35 Treating Export as Single Consignment 52260 6.48 61.47 57.48 13. On going through the fact that as the Fe content is to be calculated on WMT and as per the test reports of the goods in question which have not been disputed by either of the sides, the Fe content on WMT treating the whole consignment as one consignment works out to 57.48% which is less than 58%, therefore, we hold that the appellant is not liable to pay any duty on the export of the said consignment treating as single consignment. 14. In view of this, the impugned order is not sustainable in the eyes of law. Consequently, no penalty is imposable on the appellants. 15. Therefore, we aside the impugned order and allow the appeals with consequential relief, if any." 19. Therefore, we hol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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