2025 (8) TMI 182 - HC - Customs

Fe Content in IOF Must Be Measured by WMT, Not DMT, Upholding Judicial Consistency Under Section 130 Customs Act

The HC held that the Fe content in IOF must be determined on the basis of WMT, not DMT, following the precedent set by a coordinate bench. The court ... Substantial question of law or not - Conscious avoidance of the customs duty by splitting one consignment into different components - Revenue contended that the Fe content is to ascertained on the basis of DMT and not WMT and the test report would reveal that IOF contains more than 58% of Fe in aggregate - HELD THAT:- From the decision of the coordinate bench in the case of Commissioner of Customs (Preventive), Bhubaneswar v. Kai International Pvt. Ltd. [2024 (12) TMI 801 - ORISSA HIGH COURT], it is exposit that the Fe content in IOF is to be determined on the basis of WMT and not DMT and in view of a decision having taken in this regard and in absence of any materials forthcoming before us to take a different view, the said point having settled cannot be said to be a debatable one nor it invites any different opinion to be arrived at. The comity of the judicial discipline demands the uniformity in a proposition of law and the judgment of the coordinate Bench of a Court binds the other coordinate Bench. The only course opens to the later coordinate Bench, in the event of dissent to refer the matter to the Chief Justice to constitute a larger Bench. There are no material forthcoming to take a different view and, therefore, the judicial discipline demands the adherence of the judgment rendered by the coordinate Bench at an earlier point of time. It is not found that the contention of the appellant that Fe content in IOF is to require to be determined on the basis of DMT and not WMT is sustainable. It is not found that the instant appeals involve substantial question of law under Section 130 of the Customs Act, 1962. The appeals are dismissed. ISSUES: Whether the Fe (iron) content in iron ore fines (IOF) for the purpose of customs duty assessment is to be determined on the basis of Wet Metric Ton (WMT) or Dry Metric Ton (DMT).Whether splitting a single consignment into multiple shipping bills to evade customs duty constitutes conscious avoidance of customs duty under the Customs Act, 1962.Whether the question of law raised regarding the basis of Fe content determination constitutes a 'substantial question of law' under Section 130 of the Customs Act, 1962.Whether a party can take inconsistent stands at different stages of proceedings in relation to the basis for determining Fe content. RULINGS / HOLDINGS: The Fe content in IOF is to be determined on the basis of Wet Metric Ton (WMT) and not on Dry Metric Ton (DMT), as held by the coordinate Bench and supported by statutory circulars and judicial precedent.The contention that Fe content should be assessed on DMT basis is 'not sustainable' and does not attract a different opinion given the settled position of law.The splitting of consignments into multiple shipping bills with differing Fe content to evade customs duty was alleged but the demand for differential customs duty was rejected by the adjudicating authority and upheld by the Tribunal, based on the correct application of WMT for Fe content determination.The question whether Fe content is to be determined on WMT or DMT basis does not constitute a 'substantial question of law' under Section 130 of the Customs Act, 1962 because it is a settled legal proposition and not debatable or open to alternative views.A party cannot be permitted to assume inconsistent positions at different stages of the proceedings; the appellant's change of stance on the basis for Fe content determination is impermissible and violates the principle against approbation and reprobation. RATIONALE: The Court applied the test for 'substantial question of law' as articulated in authoritative precedent, emphasizing that such a question must be debatable, not settled by binding precedent, and must have material bearing on the rights of parties.The Court relied on a coordinate Bench decision which held that for customs duty purposes, Fe content must be assessed on WMT basis, consistent with a circular dated 17th February 2012 clarifying uniformity in assessment.The principle of judicial discipline and comity among coordinate Benches was emphasized, mandating adherence to earlier decisions unless a larger Bench is constituted.The Court invoked the doctrine against inconsistent pleadings, referencing established case law that prohibits a litigant from taking contradictory positions to the detriment of the opposing party.The Court noted that the adjudicating authority and Tribunal had correctly applied the law and that the appeal did not raise any new or unsettled substantial question of law warranting interference.