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TMI Blog2024 (9) TMI 1695X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Shri Rajeev Tandon, Member (Technical) For the Revenue : Shri S.Debnath, Authorized Representative. For the Respondent : Shri Alok Agarwal & Shri Prachit Mahajan, both Advocates. ORDER PER : RAJEEV TANDON : The present order deals with 9(nine) appeals filed by the Revenue as per details hereinbelow: Sl. No. Appeal No. Party's Name Order-in-Original No. Show Cause Notice No. DIN No. 1. C/75900/2024 M/s. S.M. Niryat Pvt. Ltd. CC(P)/BBSR/CUS/No.04/ COMMISSIONER/2024 dated 18.01.2024 VIII(10)91 SCNSMNDRICUSP BBSR2020 dated 10.09.2021 2. C/76103/2024 Shri Ajay Gupta CC(P)/BBSR/CUS/No.04/ COMMISSIONER/2024 dated 18.01.2024 VIII(10)91 SCNSMNDRICUSP BBSR2020 dated 10.09.2021 3. C/76106/2024 Shri Manish Khemka CC(P)/BBSR/CUS/No.04/ COMMISSIONER/2024 dated 18.01.2024 VIII(10)91 SCNSMNDRICUSP BBSR2020 dated 10.09.2021 4. C/75901/2024 M/s. Disha Realcon CC(P)/BBSR/CUS/No.01/ COMMISSIONER/2024 dated 08.01.2024 20210276NN 000000D401 dated 01.03.2021 5. C/76102/2024 Shri Ajay Gupta CC(P)/BBSR/CUS/No.01/ COMMISSIONER/2024 dated 08.01.2024 20210276NN 000000D401 dated 01.03.2021 6. C/76105/2024 Shri Manish Khemka CC(P)/BBS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... percentage of iron ore content in the export goods. The department submits that loading of the iron ore fines of two varying types of consignments in the concerned vessel, loading them in the same hatches of the vessel brought about a mixing of different quality/grade of the export goods. It was therefore alleged by the department in the show cause notices issued, that the exporter adopted such a unique modus operandi to evade export duty upon part consignments of iron ore fines, wherein the quantity of Fe content was more than 58%. In the ultimate, the contention of the department being that the export goods were so loaded in the vessel in combined form, in one and the same vessel, so that the average iron content of the „complete consignment' having both low grade cargo as well as high grade cargo of iron ore fines became so as to be rendered dutiable. 5. Contrary to the above, the contention of the respondents is that they had exported iron ore fines, having iron content less than 58% on WMT basis, even if all the shipping bills exported in various vessels were clubbed together. 5.1 The following table brings out the details of iron ore content as exported and ascer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me liable for payment of Customs duty. Investigations were initiated culminating in the issuance of the show cause notice to the two exporters M/s. S.M.Niryat Pvt.Ltd. and M/s. Disha Realcon Pvt. Ltd. and Director Shri Manish Khemka and Manager Shri Ajay Gupta respectively. The adjudicating authority dwelt on the entire aspect of the matter extensively and dropped the demands. He however imposed penalty on the appellants under section 114AA of the Customs Act on the respondent as already indicated in foregoing paras. The respondents too have filed Cross Objections disputing the penalty imposed on them under Section 114AA of the Customs Act. 8. It is borne out from records as well as the adjudication order that wherever the noticee had declared iron content more than 58% appropriate export duty was paid by the respondent at the time of the export of the said goods. The Revenue's contention only being that as high grade cargo was mixed with that of low grade iron content and that the full cargo loaded in the vessel became more than 58% in the vicinity of 61%, complete cargo loaded in the vessel ought to have suffered appropriate export duty. Citing the various test reports, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement of Hon'ble High Court of Bombay at Goa has already been accepted by the competent authority of the Department. (iii) CESTAT vide Final Order No. 76645/2023 dated 15.09.2023 in the case of Bagadia Brothers Pvt.Ltd. has ordered that - "convert the % of Fe in DMT basis to %age on WMT basis by applying the universally recognized 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" (iv) The Commissioner of Customs (Port), Kolkata accepted the Hon'ble CESTAT Final Order No. 76644-76645/2023 dated 15.09.2023 in Customs Appeal No. 75008 of 2021 in the matter of M/s. Bagadiya Brothers Pvt.Ltd. On 29.12.2023 with the concurrence of the Chief Commissioner of Customs, Kolkata, Kolkata Zone. (v) The Commissioner of Customs (Prev.), Customs (Preventive) Commissionerate, Bhubaneswar has also accepted the aforesaid Order of the Hon'ble CESTAT Final Order No. 76644-76645/2023 dated 15.09.2023 in Customs Appeal NO.75008 of 2021 in the matter of M/s. Bagadiya Brothers Pvt.Ltd. with the concurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of the iron percentage content in the export cargo, the adjudicating authority has specifically noted that on WMT basis the iron ore content in various consignments of the export cargo stood below 58% both shipping bill wise as well as on the entire/full cargo load basis and therefore the question of demand of differential duty on entire/full cargo loaded on the basis of private test agencies deriving iron content on DMT basis would not hold good. Guided by settled law and the apex court's ruling the adjudicating authority has determined the iron content on WMT basis below dutiable thresholds and we see nothing wrong in so doing. The question of adoption of the said principles, formula, computation on WMT basis, its ascertainment through DMT data are all matters that are since well settled by way of orders passed by several judicial authorities as well as the Circular issued by the Board. Based on the said premise the adjudicating authority has dismissed the department's proposal and claim for a revised classification and valuation of the subject goods. We are in agreement with the adoption of the aforesaid mechanism by the adjudicating authority in arriving at his f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty under Section 114AA on the respondents herein. Moreover, there is no discussion in the order passed by the learned Commissioner, with regard to justification for imposition of such a penalty on the respondents. For this reason alone, being bereft of any basis or argument, other than stating that the Director failed to inform the steve-doers, Customs brokers of the fact of the export lot comprised of distinct consignments, as per S/B filed and the fact of provisional/final invoices of the buyers, we see no merit in the imposition of penalty supra. As for the employee Ajay Gupta the crucial reason for imposition of penalty, is that he was found to be in possession of invoices pertaining to export of iron ore fines that were loaded into the vessels. This is no plausible reason and the penalty imposed is liable to be set aside, as the said invoices could not be connected to the impugned shipment. Having found commissioning of no wrong we fail to appreciate the logic for imposition of any such penalty on each of the respondents. In view of our findings above, we see no reason in the proposal of the Revenue to impose penalty under Section 114A of the Customs Act on the respondents. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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