TaxTMI 
TaxTMI 
2024 (9) TMI 1695
X X X X Extracts X X X X
X X X X Extracts X X X X
....R. Muralidhar, Member (Judicial) Hon'ble Shri Rajeev Tandon, Member (Technical) For the Revenue : Shri S.Debnath, Authorized Representative. For the Respondent : Shri Alok Agarwal & Shri Prachit Mahajan, both Advocates. ORDER PER : RAJEEV TANDON : The present order deals with 9(nine) appeals filed by the Revenue as per details hereinbelow: Sl. No. Appeal No. Party's Name Order-in-Original No. Show Cause Notice No. DIN No. 1. C/75900/2024 M/s. S.M. Niryat Pvt. Ltd. CC(P)/BBSR/CUS/No.04/ COMMISSIONER/2024 dated 18.01.2024 VIII(10)91 SCNSMNDRICUSP BBSR2020 dated 10.09.2021 2. C/76103/2024 Shri Ajay Gupta CC(P)/BBSR/CUS/No.04/ COMMISSIONER/2024 dated 18.01.2024 VIII(10)91 SCNSMNDRICUSP BBSR2020 dated 10.09.2021 3. C/76106/2024 Shri Manish Khemka CC(P)/BBSR/CUS/No.04/ COMMISSIONER/2024 dated 18.01.2024 VIII(10)91 SCNSMNDRICUSP BBSR2020 dated 10.09.2021 4. C/75901/2024 M/s. Disha Realcon CC(P)/BBSR/CUS/No.01/ COMMISSIONER/2024 dated 08.01.2024 20210276NN 000000D401 dated 01.03.2021 5. C/76102/2024 Shri Ajay Gupta CC(P)/BBSR/CUS/No.01/ COMMISSIONER/2024 dated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as high grade iron ore fines (more than 58%) and loading them onto the same hatchet of the vessel, without any separate distinction concerning the percentage of iron ore content in the export goods. The department submits that loading of the iron ore fines of two varying types of consignments in the concerned vessel, loading them in the same hatches of the vessel brought about a mixing of different quality/grade of the export goods. It was therefore alleged by the department in the show cause notices issued, that the exporter adopted such a unique modus operandi to evade export duty upon part consignments of iron ore fines, wherein the quantity of Fe content was more than 58%. In the ultimate, the contention of the department being that the export goods were so loaded in the vessel in combined form, in one and the same vessel, so that the average iron content of the „complete consignment' having both low grade cargo as well as high grade cargo of iron ore fines became so as to be rendered dutiable. 5. Contrary to the above, the contention of the respondents is that they had exported iron ore fines, having iron content less than 58% on WMT basis, even if all the shippi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1. 9361293 dated 17.10.17 Unity Explorer Finalised on 29.11.2019 vide F.No.S41(G)-186/2019 Exp (Misc) 2. 9361299 dated 17.10.17 Unity Explorer Finalised on 29.11.2019 vide F.No.S41(G)-186/2019 Exp (Misc) 7. The Revenue's contention thus being, that due to the apparent mixing of different grades of cargo the entire cargo had become liable for payment of Customs duty. Investigations were initiated culminating in the issuance of the show cause notice to the two exporters M/s. S.M.Niryat Pvt.Ltd. and M/s. Disha Realcon Pvt. Ltd. and Director Shri Manish Khemka and Manager Shri Ajay Gupta respectively. The adjudicating authority dwelt on the entire aspect of the matter extensively and dropped the demands. He however imposed penalty on the appellants under section 114AA of the Customs Act on the respondent as already indicated in foregoing paras. The respondents too have filed Cross Objections disputing the penalty imposed on them under Section 114AA of the Customs Act. 8. It is borne out from records as well as the adjudication order that wherever the noticee had declared iron content more than 58% appropriate export duty was paid by the respondent at the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the period prior to 01.05.2022 shall be governed by the principles of law in regard to the classification as laid down by the Supreme Court in Union of India vs. Gangadhar Narsingdas Aggarwal, as clarified by the aforesaid CBEC Circular dated 17.02.2012. This order of the Hon'ble High Court has also discussed about a universal formula to obtain Fe% on WMT basis. This judgement of Hon'ble High Court of Bombay at Goa has already been accepted by the competent authority of the Department. (iii) CESTAT vide Final Order No. 76645/2023 dated 15.09.2023 in the case of Bagadia Brothers Pvt.Ltd. has ordered that - "convert the % of Fe in DMT basis to %age on WMT basis by applying the universally recognized formula for determination of classification of IOF exported. The 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" (iv) The Commissioner of Customs (Port), Kolkata accepted the Hon'ble CESTAT Final Order No. 76644-76645/2023 dated 15.09.2023 in Customs Appeal No. 75008 of 2021 in the matter of M/s. Bagadiya Brothers Pvt....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... private test agency based on nomination of overseas buyer. He thereby clearly hints at the dilemma of the various options. However, a detailed point by point analysis of the said test reports as undertaken by the adjudicating authority clearly brings out the fact that in all cases of analysis Fe content/percentage in the export shipment, Bill of Entry wise/full cargo wise stood well below 58% on WMT Basis. 11. While arriving at his findings concerning the determination of the iron percentage content in the export cargo, the adjudicating authority has specifically noted that on WMT basis the iron ore content in various consignments of the export cargo stood below 58% both shipping bill wise as well as on the entire/full cargo load basis and therefore the question of demand of differential duty on entire/full cargo loaded on the basis of private test agencies deriving iron content on DMT basis would not hold good. Guided by settled law and the apex court's ruling the adjudicating authority has determined the iron content on WMT basis below dutiable thresholds and we see nothing wrong in so doing. The question of adoption of the said principles, formula, computation on WMT ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... authority to arrive at a finding accordingly, thereby dismissing the department's appeal. 12. We are of the strong view that merely on the premise of mixing of the cargo, post the issuance of the let export order cannot justify the claim for demand of duty on the entire lot, when there is nothing contrary to hold Fe% being more than the dutiable threshold, when arrived at on WMT basis. For the reason we find no merit in the learned adjudicating authority, imposing penalty under Section 114AA on the respondents herein. Moreover, there is no discussion in the order passed by the learned Commissioner, with regard to justification for imposition of such a penalty on the respondents. For this reason alone, being bereft of any basis or argument, other than stating that the Director failed to inform the steve-doers, Customs brokers of the fact of the export lot comprised of distinct consignments, as per S/B filed and the fact of provisional/final invoices of the buyers, we see no merit in the imposition of penalty supra. As for the employee Ajay Gupta the crucial reason for imposition of penalty, is that he was found to be in possession of invoices pertaining to export of iron ore....