Variation in Factory weight & Draft survey in Export of bulk cargo.

[vinay wakde]

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

AI Summary

Weighment variance in bulk exports: permissible shortages from weighing and transit differences may not trigger duty liability.
Minor discrepancies between factory weighment and draft survey in bulk exports, when explained by different weighing systems, transit loss, evaporation or hygroscopic cargo characteristics, may be permissible and not attract automatic duty demands or reversal of input credit. Assessment must be case-specific, considering diversion en route, conformity with tolerance limits under legal metrology standards, and whether compensation was pursued from suppliers, transporters or insurers; permissible tolerances and industry norms govern whether shortages lead to liability.