TaxTMI 
TaxTMI 
2023 (12) TMI 963
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....tion and Quality (CIQ) analysis conducted at the port of discharge as to the wet quantity of shipment and the dry quantity shall be determined by deducting the free moisture from such wet quantity. In case of variation between the weight at the point of discharge and the load port the average thereof would be arrived at, for all purposes. 2. Dispute in the present appeal concerns the 'Fe' content in iron ore fines exported vide the above referred Shipping Bill and the consequent determination of value for purposes of levy of export duty. The appellant filed the Shipping Bill intimating the iron content therein as 57.30% and moisture content as 8.98%. This was said to be based on the load port analysis, report obtained from a duly recognised testing concern- M/s. Mitra S.K. Pvt. Ltd. (MSK). As per record the discharge port report/CIQ indicated the iron content as 57.53% and moisture. The appellant submits that both the load port and the discharge port report confirms the iron content as below 58% whereby the product was classifiable under heading 26011142, attracting NIL rate of duty in terms of Notification No. 15/2016-Cus dated 01.03. 2016. 3. During the earlier round of lit....
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....etween Shipping Bill date and CHL Report date Government recognized private Laboratory Report date No. of days between Shipping Bill date and Government recognized Private Laboratory Report date 1. 7545595 24.07.2017 19.09.2017 57 09.08.2017 16 5. Thus the appellant vehemently argues that the CRCL report is unacceptable as to be the basis for determining the value of the iron ore fines. Another ground for which they hold the CRCL report as non-acceptable is for the fact that despite the said report being available and generated in 2017, yet the same was not provided to the appellant till the second round of litigation. The claim being that they had been denied an opportunity to prefer an appeal and argue their case against the said report for retesting of the samples. The appellant, therefore contends that for this reason alone, the impugned order is liable to be set aside as the relied upon report is nothing short of being a fallacy. 6. The learned Authorised Representative for the department, Shri Subrata Debnath, however supports the order in appeal and points out that the iron content being over 62%, (62.4% to be precise) on Dry Weight basis and....
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....mple for chemical analysis : The laboratory samples shall be obtained after the material in pulverized to pass through 150 microns. 4. This method is not applicable to divide samples containing high moisture content, of sticky iron ore. However, samples may be sufficiently dried before division. 12.1- Moisture samples : To avoid any change in Moisture content, the Moisture determination shall be done as quickly as possible, after sample is taken. Moisture determination shall be determined as per IS 11690. 8.1. In the present case, it nowhere comes on record that the sample of Customs House Laboratory were drawn in strict adherence to the BIS Standards, as also contained in the Board's Circular. Moreover, the sample is alleged to be drawn by the Customs Officer at the back of the appellant and without the knowledge of the exporter, which is against the statutory mandates provided under Section 144 of the Customs Act, 1962. They thus state that the Test Report given on the basis of the sample which was not drawn as per BIS, cannot be considered for any proceedings and the said Test Report is not valid for the purpose of determination of Fe conte....
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....d acceptability. Since the report of the Customs Lab is cryptic and incomplete without showing the BIS Standard and protocol and method of testing, it is noticed that the appellant sought to cross examine the Customs Officer who had drawn the sample and the Chemical Examiner who had tested the sample. 9. It is thus evident that the CRCL test report is not only cryptic, but it is also not clear whether the same was in accordance with the prescribed standards. The fact that the sample was tested nearly two months after its drawal and had not been stored in accordance with the prescribed conditions, the reliability of the test result, therefore is not only doubtful but also unreliable. We also note that the Board's Circular- 12/2014-Cus clearly states that the sample is to be drawn in accordance with the BIS standards. 10. It is informed that the sample was found to be kept in plastic bags and not in air tight containers with appropriate lids. As the sample has not been drawn in accordance with laid down standards, the test results thereof cannot form the basis of any decision making process. On the aspect of drawal of sample and it's reliance the Hon'ble Apex Court, in the case....
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.... 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. iii) finalise the assessments accordingly. (iii) M/s. Mineral Enterprises Ltd. Vs. C.C, Mangalore 2010 (253) ELT 241 (Tri-Bang), "9. We also find that revenue aggrieved by such an order and they took this mater in a Civil Appeal before the Hon'ble Supreme Court and the Apex Court 1997 (89) ELT 19 (SC) have upheld the decision of the Hon'ble High Court of Bombay. The ratio of the said decision is that whenever any sample has to be tested, it has to be tested in the condition in which goods were exported. If it be so, we find that the Deputy Chief Chemist report as reproduced herein above cannot be relied upon by the Revenue. 10........................ 11. We also find that the reliance placed by the learned Counsel on the above said case has strong force. In that case also an identical issue was decided by this Bench and upheld that testing of a sample after 6 months will not give same iron content, which was found at the time of export." 12. The fact of th....
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....umpy iron ore would fall for the purposes of charging duty under the aforesaid Notifications. This view which the learned Single Judge took and which came to be affirmed by the Division Bench of the High Court appears to us to be the correct view to take, for the reason that if the percentage of iron content is determined after ignoring the moisture the percentage would not be relatable to the lumpy iron ore weighed at the relevant point of time for the purposes of charging duty. We, therefore, do not think that the High Court committed any mistake in the view it took. Even if two views were possible the view taken by the High Court being a plausible one would not call for intervention by this court." 13.1. The test report in the present matter is also contrary to the circular issued by the CBEC. In the case cited above, Hon'ble Apex Court it has been clarified that for the purpose of charging export duty, the assessment of iron ore fines for determination of Fe content shall be on Wet Metric Ton (WMT) basis, after deducting the weight of impurities (inclusive of moisture) out of the total weight/gross weight, to arrive at the net Fe content. In the present case the Fe content o....
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....f law in regard to classification, as laid down by the Hon'ble Supreme Court, in the case of Union of India Vs. Gangadhar Narsinghdas Agarwal1, (Supra). 16. It would be pertinent to place on record the concerned test reports of the load port as well as that the discharge port. The same are scanned below, indicating Fe content on dry basis to be less than 58%. We also note that the impugned test reports dwell at length on the manner of drawal, storage and analysis of the samples carried out, which indicates their adherence to BIS prescriptions. 17. Further, the Gangadhar case was also analysed by the Hon'ble High Court, Bombay in the case of V.M Salgaocar Brothers and Others Ltd. Vs. Union of India 2022 (9) TMI 1306 Bombay, High Court, wherein the Hon'ble High Court in para 42 of its order laid down certain guidelines and principles required to be adhered to and for ease of the analysts/chemists and others concerned. The relevant extract thereof is reproduced hereunder : "40. The Revenue carried Gangadhar's case to the Supreme Court. The Supreme Court observed that the duty was required to be determined on the weight of the commodity at the relevant point of time, ....
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....ure, the percentage would be relatable to the lumpy iron ore weight at the relevant point of time for the purposes of charging duty. The Supreme Court observed that even if two views were possible the view taken by the High Court being a plausible one would not call for intervention by the Supreme Court order.......................... 42. It is thus clear that the Supreme Court in affirming the view of the learned Single Judge as also the learned Division Bench in the case of Gangadhar Agarwal (supra) has approved the WMT method considering the fact that the goods (iron ore) is required to be considered in its natural form at the time of its export which contain the moisture and other impurities. The following are the principles which can be culled out from the said three judgments in Gangadhar Agarwal's case in regard to the classification of the Fe (iron) content in the iron ore for the purpose of levy export duty:- (i) The iron ore when subjected to export, is exported in its natural condition so as to include impurities and moisture. (ii) It is not in dispute that there is no method or formula to determine the iron contents while the goods are in mois....
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....aboratories in regard to the iron content in the moist iron ore and moist lumpy iron ore being exported, indicating the percentage of the iron content in the goods subject matter of export, needs to be accepted. (vii) Merely because in respect of moist iron ore, iron content cannot be determined directly by physical analysis, this cannot lead to a result that the iron ore content cannot be determined at all ore that the assessee should be deprived of its just claim on such footing. (viii) It is immaterial what method one adopts for the purpose of separating the iron content from the lumpy iron ore but the percentage has to be determined from the total weight which was available at the given point of time "after the iron content is determined." This is because the duty is relatable to weight and therefore once the iron content is determined, keeping in mind the total weight, the percentage of iron ore can be determined separating the iron content from rest of the impurities inclusive of moisture and thereafter to be ascertained in which category the lumpy iron ore would fall for the purpose of charging duty under the Tariff items/notification. (ix) The per....
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.... 2010 13039001:200 Certificate Annexure - 3 66 66 Document 2 Mitra S. K. Private Limited 143 Acharya Jagah Chan 70000 JON UW MSK com CHEMICAL COMPOSITION (ON DRY BASIS) Test Method Ted Resal 11. Fe IS 149Pan-11:1us RA 3111 " 57.36 PCT 12. S02 IS 1493 Pan-13:1981 RA 2011 KT 13 ADO IS 1493 Pan-1):1981 RA 2011 5.38 PCT 34 P IS 1493-1959 RA 2011 0.040 PCT 0.010 PCT 15. S ISO 4689-1:2015 PHYSICAL COMPOSITION 16 Moisture (Determined at 105 °C) 17 Aleve 16 MM 18. Below 150 MICRON 19. Below 10 MM Prepared by: & PCT 3.03 PCT 1964 PCT 9657 PCT For Mitra S. K. Private Limited Authorised Signatory 150 9001:2008 Certificate www..com 67 10 Document 3 10 ä¸åŽäººæ°‘共和国出入境检验检疫 ENTRY-EXIT INSPECTION AND QUARANTINE OF THE PEOPLE'S REPUBLIC OF CHINA å“è´¨è¯ä¹¦ 王本 ORIGINAL RIN. MIPageloft No.: 11700 70 CERTIFICATE OF QUALITY 收货人 Consignee SHANGHAI ESTEEL CO.LTD å‘货人 Consignor ***....