Export eligibility for iron ore fines turns on testing the goods in the condition actually exported, not moisture-free analysis.

Export liability for iron ore fines must be assessed on the goods as actually presented for export. Where the cargo was exported in moist condition, a later moisture-free chemical test showing higher Fe content could not be relied on to sustain confiscation or penalty, especially when earlier certificates and destination-port inspection material indicated a lower Fe content. Applying the principle that the sample must be tested in the same condition as exported, the moisture-free analysis was treated as an unreliable basis for liability. On that reasoning, confiscation and penalty were held not sustainable and the impugned order was set aside.

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Issues: Whether the export consignment of iron ore fines was liable to confiscation and penalty on the basis of a chemical report showing Fe content above the permissible limit when the goods were exported in moist condition.

Analysis: The permissible export threshold under the applicable export policy turned on the Fe content of the goods as exported. The goods were admittedly exported in moist condition, but the Revenue relied on a report that determined Fe content on a moisture-free basis, and the report was obtained months after export. The earlier certificates and destination-port inspection materials indicated a lower Fe content. Following the settled principle that the sample must be tested in the condition in which the goods were presented for export, the moisture-free analysis could not be treated as a reliable basis to sustain confiscation. The contrary view would distort the true condition of the exported goods and the resulting Fe percentage.

Conclusion: The confiscation and penalty were not sustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: For determining export eligibility of mineral cargo, the sample must be assessed in the same condition in which the goods were exported, and a moisture-free test cannot be used to fix liability where the goods were exported in moist condition.

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