AI Drafter 
TaxTMI 
TaxTMI 
2025 (2) TMI 277
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....e [DRI]. 2. M/s. Disha Realcon Pvt. Ltd. [Disha Realcon] filed appeal C/54710/2023 to assail the confirmation of demand of duty and imposition of penalty upon it. 3. Shri Ajay Gupta [Ajay Gupta] filed appeal C/54711/2023 to assail the imposition of penalty on him. 4. Shri Manish Khemka [Manish Khemka] filed appeal C/54712/2023 to assail the imposition of penalty on him. 5. M/s. S.M. Ayat Niryat, Pvt. Ltd. [SM Niryat] filed appeal C/54713/2023 to assail the confirmation of demand of duty and imposition of penalty. 6. In the SCN, DRI proposed re-determination of the export duty on iron ore fines exported by the Disha Realcon and SM Niryat through several Shipping Bills filed in custom houses falling under the jurisdictions of Commissioner of Customs, Bhubaneshwar and the Commissioner of Customs, Kolkata, recovering the differential export duty and imposing penalties. The appellants were asked to show cause to the two Commissioners in respect of the respective Shipping Bills. Notifications dated 20.3.2020 and 31.3.2022 appointed the Commissioner (Adjudication) New Delhi as the common adjudicating authority who decided the proposals in the SCN through the impugned order.....
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....de iron ore fines with Fe content below 58% (light brown/red colour) and the other consignment declared as high grade iron ore fines with Fe content above 58% (dark brown/red colour). (ii) After getting the Let Export Orders [LEO] from Customs for the two Shipping Bills, they would load both consignments of iron ore fines in the same hatch (Hold of Vessel, for storage of cargo) of the Vessel without any distinction as to the quality of cargo and all the fines were being mixed. (iii) The average Fe content of the entire consignment was more than 58%. However, in order to evade export duty, they were filing two Shipping Bills such that part of the iron ore fines are covered in one Shipping Bill which has less than 58% Fe content and no duty was paid on it. (iv) Panchama dated 07.12.2017 which was enclosed as Relied Upon Document [RUD]-1 shows that heaps of iron ore of low grade iron ore fines with Fe content below 58% (light brown/red colour) and high grade iron ore fines with Fe content above 58% (dark brown/red colour) were being unloaded from trucks at the jetty area, were being blended into each other by JCB machines and then the mixture of the two type....
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.... the Fe content of the exported iron ore fines must be determined on dry weight basis and not on wet basis as was done by the appellant. For instance, if 100 kg of wet iron ore fines has, say, 10 kg moisture and 57 kg iron, the Fe content on wet basis shall be 57/100 x100 =57% and the export consignment would be exempted from duty. However if it is calculated on dry basis, it shall be 57/90x100 = 63.33% and export duty would have to be paid. 14. Before issuing the SCN, DRI had issued a pre-consultation notice and in response, the appellants, inter alia, explained that the Supreme Court decided in Gangadhar Narsingdas that Fe content should be determined on wet basis only and not on dry basis. After this decision, the CBEC Circular no. 04/2012-Cus dated 17.02.2012 directing that Fe content should be determined on wet basis in view of Gangadhar Narsingdas. 15. The SCN was issued proposing to consider the overall Fe content of the consignments of Fe exported in each vessel (on dry basis) and thereby denying the benefit of the exemption and recovering differential duty. While calculating the Fe content to determine the duty, the law laid down by the Supreme Court in Gangadhar Nar....
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....alue of Export Goods) Rules. 4.2) I confirm the demand of duty of Rs 52,44,55,725/- (rupees fifty two crore forty four lakh fifty five thousand seven hundred twenty five) (shipping bills and worksheet in table 50, 51 and 52 of the notice) as export duty on M/s SM Niryat Pvt Ltd under section 28(4) of Customs Act 1962. The interest on duty short paid is also recoverable under section 28AA of Customs Act from the date of Let export order in each shipping till the payment of the differential duty. The additional amount of Rs 7,72,11,419/- (rupees seven crore seventy-two lakh eleven thousand four hundred nineteen) as differential duty paid during the investigation is appropriated against the duty short paid and accordingly the interest on delayed payment of duty shall be adjusted. 4.3) I confirm the demand of duty of Rs 2,80,66,728/- (rupees two crore eighty lakh sixty six thousand seven hundred twenty eight) (shipping bills and worksheet in table 53 of the notice) as export duty on M/s Disha Realcon Pvt. Ltd under section 28(4) of Customs Act 1962. The interest on duty short paid is also recoverable under section 28AA of Customs Act from the date of Let export order ....
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.... Court in Gangadhar Narisnghdas and also the instructions in CBEC's Circular? 19. Section 50 of the Customs Act requires the exporter to ‗make an entry' of the export goods by filing the Shipping Bill or Bill of Export (in case of exports by land) and section 51 of the Customs Act empowers the proper officer to give clearance for the export consignments. The Shipping Bill is not only a declaration of the goods to be exported but is also the document through which export duty, if any, is assessed. Duty must be self- assessed by the exporter and it can be re-assessed by the proper officer under section 17 of the Customs Act. ‗Assessment' is defined in section 2(2) of the Customs Act. These provisions are reproduced below: "Section 2 (2) 'assessment' means determination of the dutiability of any goods and the amount of duty, tax, cess or any other sum so payable, if any, under this Act or under the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act) or under any other law for the time being in force, with reference to- (a) the tariff classification of such goods as determined in accordance with the provisi....
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....ere the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation: Provided that such order may also be made electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria: Provided further that the Central Government may, by notification in the Official Gazette, permit certain class of exporters to make deferred payment of said duty or any charges in such manner as may be provided by rules. (2) Where the exporter fails to pay the export duty, either in full or in part, under the proviso to sub-section (1) by such due date as may be specified by rules, he shall pay interest on said duty not paid or short-paid till the date of its payment at such rate, not below five per cent and not exceeding thirty-six per cent per annum, as may be fixed by the Central Government, by notification in the Official Gazette." 20. The Customs Act does not empower any....
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....t is the income in the first year and taxed at a higher rate. Conversely, the assessee cannot claim to treat income of the first year to be treated as income in the second year and lower his taxes. Any adjustments between financial years can be made only as provided in the law (for instance, carrying forward depreciation or losses). 26. Similarly, in Customs, each Bill of Entry or Shipping Bill has to be assessed. If an importer, for instance, paid excess duty in one Bill of Entry and short paid duty in another, Revenue can raise a demand under section 28 in the Bill of Entry where the duty was short paid and the importer can claim refund of the duty paid in excess under section 27 and it will have to be processed accordingly. 27. Two or more Bills of Entry or Shipping Bills cannot be taken together and assessed. The only exception made in the law are the Project Imports under Project Import Regulations, 1986. If the importer claims and is allowed imports under these regulations, all goods imported under various Bills of Entry under the project are assessed together under a single tariff heading 98.01. All assessments are kept provisional and at the end all assessments....
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.... ore fines of high Fe content. The rates of duty and exemptions and whether the duty was on ad valorem or specific basis varied from time to time but there was always a question of determination of Fe content. 32. In Gangadhar Narisnghdas, the Supreme Court decided that it should be determined on wet basis. This judgment is reproduced below: "1. Delay condoned. 2. Special leave granted in all the Special Leave Petitions. 3. By Notification No. GSR 1152, dated 24th July, 1967 issued under section 25(1)of the Customs Act, the Government exempted iron ore fines falling under Item 29 of the second schedule to the Tariff Act when exported out of India from so much of the duty leviable thereon as is in excess of Rs. 3/- per metric ton, where the iron content in the iron ore fines was below 62% and where it exceeds 62% so much of the duty as is in excess of Rs. 4/- per metric ton. By another Notification dated 31st August, 1968 the Government exempted lumpy iron ore falling under Item 28 of thesecond schedule to the Tariff Act when exported out of India from so much of the duty as was in excess of the duty shown in Column (iii) depending on the iron content i....
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....ions. 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. 5. In the result, the appeals fail and are dismissed with no order as to costs. The question of refund will be considered in accordance with law where refund is not already given." (emphasis supplied) 33. It is evident from the above that the case before the Supreme Court was on identical issue and the ground taken by the Revenue that the standard testing method prescribed by ISI (now BIS) provides for determination of Fe content on dry basis were considered and rejected by the Supreme Court. When issuing the SCN, the Additional Director General and while p....