We are Exporting Iron Ore Fines (bulk loose cargo Approx. 50,000 MTs) under Letter of undertaking. The material removed from factory to jetty under cover of Invoice.The material thereafter sent to highseas through Mini bulk carriers (MBCs) for unloaded into the Mother Vessel. After completion of loading Draft survey of Mother vessel is done at highseas in presence of Customs officers. We have observed quantity variation as per the draft survey report & factory weightment, which is more than 1% of total cargo removed from the factory. We have received letter from Excise Department for payment of duty to the extent of quantity found short.
Is there any CESTAT judgement to justify the variation of two different weighment system.
Regards,
VINAY
Discrepancies in Iron Ore Weights: Excise Dept Demands Duty, CESTAT Judgments Cite Permissible Variations, No CENVAT Reversal Needed. A query was raised regarding discrepancies in weight measurements of iron ore fines exported under a Letter of Undertaking, where the draft survey at sea showed more than a 1% variation from factory weights. The Excise Department demanded duty payment for the shortfall. Responses cited several CESTAT judgments, indicating that minor discrepancies due to different weighing systems, transit losses, or hygroscopic nature are generally permissible and do not require reversal of CENVAT credit. Each case should be assessed based on factors like potential en-route diversion, hygroscopic properties, and whether the variation is within legal tolerance limits. (AI Summary)
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