TaxTMI 
TaxTMI 
2024 (12) TMI 888
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....was sent to the Deputy Chief Chemist Chemical Laboratory Customs House, Kolkata-700001 ('CRCL' for short) for testing. Based on the Test Report received from the CRCL, the Department issued the Show Cause Notice demanding export duty @30% of FoB on the ground that in both the cases, the 'Fe' content was more than 58% in DMT, whereas the Respondent-Company claimed that in all these cases, the Fe content was less than 58%, in DMT as well as in WMT. 2.1. After due process, the assessment was finalized by the Assistant Commissioner of Customs, Gopalpur Customs Division, Arjeepalli, Chattrapur, Odisha - 761020, vide Order-in-Original No. CUS/GCD/AC/118/SB/111 Dated 08.10.2021, demanding Export Duty @30%. 2.2. On appeal, the Ld. Commissioner (Appeals), Bhubaneshwar, vide the impugned order, has allowed the Appeal filed by the appellant (Respondent herein) on the ground that there is substantial delay of more than one month in testing the samples by CRCL and since the moisture content in Iron ore is prone to evaporation, the delay in testing resulted in evaporation of moisture content. Therefore, the Ld. Commissioner (Appeals) observed that the test report issued by Mitra S.K. Priva....
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.... thus it becomes the basis of Final Invoice for Fe contents, moisture and other impurities, weight, etc., and other adjustments as required to be made for Bonus and penalties, etc., for arriving final price in respect of both the shipping bills. 5.1. It is further submitted that in the present case, the Final Invoice has been issued based on Load Port Report issued by 'Mitra SK' which has been accepted by the buyer and is the basis on which export remittance has been made and received, duly supported by Bank Realisation Certificate and a Certificate issued by an Independent Chartered Accountant. He submitted in this regard that the Final Invoice Price and value of Final Invoice had been arrived at on the basis of Fe content @57.14% on DMT basis i.e., below 58%, which has never been objected to by Department. Accordingly, he submitted that proposing levy of Export duty by treating Fe contents as more than 58%, on the basis of CRCL report, would be contradictory to the terms contained in the contract, as the export proceeds were paid for Fe contents below 58%. 5.1. The Final Invoice issued on the Load Port Test Report, having Fe contents and moistures, is as below: - Shippin....
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....ustoms, Visakhapatnam [Final Order Nos. A/30317-30324/2024 dated 21.06.2024 in Customs Appeal No. 25364 of 2013 & ors. = 2024 (6) LCX 0074-CESTAT, Hyderabad] iv. Kutch Salt & Allied Industries Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos. A/30223-30224/2024 dated 01.04.2024 in Customs Appeal No. 21505 of 2015 - CESTAT, Hyderabad] v. Moorgate Industries (I) Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata [Final Order No. 77639 of 2023 dated 30.11.2023 in Customs Appeal No. 75506 of 2023 - CESTAT, Kolkata] vi. Terapanth Foods Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos.A/30231-30232/2024 dated 05.04.2024 in Customs Appeal No. 22188 of 2015 - CESTAT, Hyderabad] 6. Heard both sides and perused the appeal documents. 7. We observe that the question to be answered by us in this case is as to whether the CRCL Report is required to be considered for the purpose of Final Assessment of the Exported Iron Ore Fines. Accordingly, the issue to be decided is whether the Export Duty can be levied based on the test report of the Chemical Examiner of CRCL or not, when the Final Invoice / realised price is arrived at on the basis o....
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....ourt or in other words to substitute the Wet (WMT) method. This is clear from the fact that such modification from the Wet method to the Dry method, has been very recently introduced by an amendment which is brought about w.e.f. 1st May 2022..." 7.4. We observe that the following orders on this issue also supports the case of the Respondent: - i. Vedanta Ltd. v. Commissioner of Customs (Prev.), Bhubaneswar [Final Order No. 76352 of 2023 dated 18.08.2023 in Customs Appeal No. 79383 of 2018 - CESTAT, Kolkata] ii. Bagadiya Brothers Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata [Final Order Nos. 76644-76645 of 2023 dated 15.09.2023 in Customs Appeal No. 75008 of 2021 & anr. - CESTAT, Kolkata] iii. Bonai Industrial Co. Ltd. & ors. v. Commissioner of Customs, Visakhapatnam [Final Order Nos. A/30317-30324/2024 dated 21.06.2024 in Customs Appeal No. 25364 of 2013 & ors. = 2024 (6) LCX 0074-CESTAT, Hyderabad] iv. Kutch Salt & Allied Industries Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos. A/30223-30224/2024 dated 01.04.2024 in Customs Appeal No. 21505 of 2015 - CESTAT, Hyderabad] v. Moorgate Industries (I) Pvt. Ltd. v. C....
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....d the Circulars as well as directions issued in above mentioned decisions. 7.8. We also place our reliance upon the decision of the Hyderabad Bench of the CESTAT in the case of Kutch Salt & Allied Industries Ltd. v. Commissioner of Customs, Vijayawada [Final Order Nos. A/30223-30224/2024 dated 01.04.2024 in Customs Appeal No. 21505 of 2015 - CESTAT, Hyderabad] reported in (2024) 19 Centax 72 (Tri.-Hyd.). The relevant part of the said decision is reproduced below :- "19. To examine this re-determination in the impugned order, we need to examine as to what is transaction value. Transaction value is the price paid or payable by the importer (buyer) to the exporter (seller) as a consideration for the goods which are exported. It is negotiated and agreed to by them in the contract. Nobody else, including the Customs officers have any role in deciding the transaction value because they are strangers to the contract. It determines the rights and liabilities between the buyer and seller....... If the transaction value is contingent upon certain other factors as per the contract between them, it will have to be determined accordingly. Nobody else who is not a party to the contra....
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....report, was calculated after removing moisture and other impurities i.e., on DMT basis, which is against the ruling of the Hon'ble Supreme Court and directions issued by the C.B.I.C. We observe that the Test Reports relied on by the Respondent, on the basis of which the final Invoice was issued, had clearly certified that the Fe Content was 57.56% in DMT (below 58%) with moisture contents 9.71%. The Fe contents calculated on WMT basis come to 51.97%. The certificate produced by the Accredited Approved Inspection Agencies cannot be disregarded and is required to be accepted. We also observe that the issue is covered in favour of the Respondent in the cases of Alpine International v. Commissioner of Customs, Mangalore [2008 (224) E.L.T. 331 (Tri.-Bang.)], Mineral Enterprises Ltd. Vs Commissioner of Customs, Mangalore [2010 (253) E.L.T. 241 (Tri.-Bang.)] and General Nice Mineral Resources (I) P. Ltd. Vs Commissioner of Customs, Vijayawada [2017 (352) E.L.T. 94 (Tri. Hyd.)]. 9. We further observe that as per Section 14 of the Customs Act the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable f....
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....lisation Certificates for the purposes of comparison with the final invoices submitted by the exporter to satisfy the accuracy of assessed values. 9.3. We observe that Clauses 7 and 8 of the Contract mentions that the Load Port test report results have become final for determining the Fe, Moisture and other contents / impurities for the purpose of issuance of final invoice and accordingly, the final invoice is issued and remittance of export proceeds received from foreign buyer, which is duly supported by BRC. 9.4. The valuation of Exported Iron Ore Fines has to be derived based on terms of contract with Foreign Buyer and as per the Contractual agreement. Accordingly, we find that Load Port Test Report / Test Certificate in the present case would be the decisive factor for the determination of the iron content in the export product. This stand is substantiated by the fact that the remittance has also been received in proportion thereof only. Accordingly, the Fe contents of 57.56% in DMT as per Test Report of Load Port i.e., below 58%, is required to be honoured, which is the basis on which the price payable or paid had been arrived, Final Invoice is issued and export remittan....