AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1016
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....C/25378/2013 have been taken up for perusal of relevant documents. The appellants have exported Iron Ore Fine wherein they were to supply Iron Ore Fine with Fe content of 63.5%. Apart from that, the contract also specified that the moisture content can be to the maximum extent of 10%. The Iron Ore consignments were cleared for export on provisional basis. After due process, the Adjudicating Authority finalised the assessments. The consignments were tested at the load port by CRCL for Fe content and the moisture content. The agency appointed by the importer [CIQ] tested the contents at the port of discharge. As per the reports given by the CRCL, the Fe percentages were more or less same as was being claimed by the appellants. However, in case of moisture content, the CRCL found that the content was between 4.20% to 6.20% as against their moisture content of 6.48% to 10.13% claimed by the appellants in all these consignments. The Revenue took the view that since the appellant was being paid based on the net weight arrived at after discounting the moisture percentage, the appellant had cleared more quantity of Iron Ore. Thereby the total value of the exported goods should be more than....
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.... mis-declaration of value. Further, I do not have any documentary evidence to prove that the exporter has received excess amount other than what he has realized in the Bank Realization Certificate (duly attested by the Bank) and the final invoice." 4. Learned Consultant relies on the CBIC Circular No. 12/2014-CUS dated 17.11.2014 wherein the Board has clarified the procedure to be followed towards valuation/assessment in respect of export of Iron Ore. 2. It has been reported that Iron ore, by its nature, undergoes a change in moisture and Fe content with the passage of time including during transport. The iron ore is tested both at the load port and at the port of discharge for ascertaining its quality and price. The commercial contracts governing its sale, often, contain provisions to adjust the amount payable depending upon the test report at the port of discharge. It is also reported that exporters present provisional invoices at the time of export since prices are to be finally determined after tests at discharge port. 3. The matter has been examined. In order to bring in uniformity, transparency and consistency in assessment of export of Iron Ore, fines an....
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....ng the per tonne USD value adopted by the appellant. He submits that, when the consignment was tested for Fe content and moisture content, the Fe content was found to be more or less correct as declared by the appellant. However, in case of moisture content, huge variation was noticed. In view of the moisture content, as a matter of fact, the actual DMT of Iron Ore exported would be higher than what were declared in the invoices made by the appellant. The Department is not disputing the per unit price for the DMT. However, once this per unit price of DMT is applied for the increased quantity of Iron Ore, in view of lesser moisture, the value could be more than what were invoiced by the appellant. Accordingly, based on that increased value, the finalisation of assessment has been completed. He also relies on the case law of Steer Overseas Pvt Ltd., Vs CC, Vijayawada. Accordingly, he submits that the appeals are liable to be dismissed. 7. Heard both sides and perused the appeal papers and written submissions and other documentary evidence along with cited case laws by both the parties. 8. In this case, the Revenue is not disputing the PDMT rate of Iron Ore exported. In respect ....
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....bills. Normally, it is seen that in case of Fe content, the unit price is to be based on the Fe content. For example for Fe content of 60% the price would be X. In case of Fe content being 61, the price would be X+1. Similarly, if the Fe content is 59, the price would be X- 1. There may also be Clause in the contract wherein if the Fe content falls below a certain percentage, the Iron Ore consignment would be rejected. In view of such provisions, the Circular specifies about the declared price in the contract and the provisions provided in the contract should be considered. In the present case, it is seen from the contract Clause 3 that moisture content is allowed to a maximum extent of 10%, this means that the consignment will not be accepted if the percentage exceeds 10%. There is no minimum moisture content specified. Apart from this, Clause 9 - Sampling and Analysis clearly specifies that the CIQ shall analyse the sample at the port of discharge and its analysis shall be final. 10. Some more Appeal documents were checked for the contract and the clause therein. The details are as given below: Appeal No. Maximum Moisture % Billing as per Rate/PDMT C/25373/2013 ....