TaxTMI 
TaxTMI 
2025 (7) TMI 1017
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.... 42.00 5,86,697 5 6142550 08.08.2019 Abrasive 42.00 5,86,697 Total 252.00 41,21,201 1.1 Out of the total five Shipping Bills as detailed above, the Shipping Bills appearing at Sr. No. 1 to 3 were finally assessed under 'Risk Management System' under the provisions of Section 17 (2) of the Customs Act, 1962 and those appearing at Sr. No. 4 and 5 were assessed provisionally under the provisions of Section 17 (3) of the Customs Act, 1962. The representative samples of the goods intended to be exported vide Shipping Bill mentioned in Table-I were drawn and forwarded to the Customs House Laboratory, Kandla by the Custom, Pipavav for ascertaining the nature of goods. In view of the pending receipt of the test result from the Customs House Laboratory, Kandla, the Appellant requested for permission to export the goods under bond. Accordingly, the goods were allowed to be exported outside India, provisionally. 1.2 As the Chemical Examiner-1, Customs House Laboratory, Kandla expressed his inability to test the sample for want of certain facilities, the samples were sent to the Central Revenue Control Laboratory, New Delhi, who reported their find....
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....f SCN. This communication cannot be criteria for imposing restriction in view of following:- a) SCN dated 02.12.2019 did not mention OM dated 25.02.2020 or 02.06.2021 nor reliance was placed on any communication made to Department of Atomic Energy. The same were neither available with the appellant nor part of SCN. Therefore, appellant cannot controvert the same in their reply. The Adjudicating Authority/Appellate Authority has therefore travelled beyond the scope of SCN by relying on aforesaid OM's which is illegal and contrary to law as held by Hon'ble Apex Court in the case of CCE, Nagpur v. Ballarpur Industries Lid reported in 2007 (215) ELT. 489 (SC), wherein it is held that show cause notice is the foundation in the matter of levy and recovery of duty, penalty and interest and if a particular Rule has not been invoked in the show cause notice, it would not be open to the Commissioner to invoke that Rule. In accordance with the ratio of this judgment. Hon'ble Tribunal Delhi in the case of Commissioner of Central Excise, Delhi-1 Versus Sharp Menthol (India) Ltd. [2015 (328) E.L.T. 543 (Tri. - Del.)] held that if some allegations based on certain evidence have not....
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....ffice Memorandum dated 25.02.2020 issued by the Under Secretary (PSU), Government of India, Department of Atomic Energy, PSU Section, Mumbai, to the Directorate General of Foreign Trade Development Officer is not binding since DGFT in the light of said communication has taken no action and has not restricted these goods as advised by the subject memorandum or issued any clarification etc; f) As per FTP/Handbook of Procedures, the power of restricting goods is vested in DGFT only. Hence, DGFT is the final authority. These goods remain under OGL for export till restricted by DGFT. Hon'ble Supreme Court in case of Atul commodities pvt. Ltd. V/s Commissioner of Customs, Cochin [2009 (235) E.L.T. 385 (S.C.)] (Annexure-11) has held that 'Under para 2.3 of the FTP (200409), DGFT is empowered to interpret the Policy. If any doubt or question arises in respect of interpretation of any provision in FTP or in the matter of classification of any item in the ITC (HS) or in the Handbook, the said question or doubt shall be referred to the DGFT, whose decision thereon shall be final and binding.'; Now since, OM dated 25.02.2020 issued by Department of Atomic Energy to DGFT merely ra....
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....issued by Ministry of mines is attached as Annexure-D1 Third party test report of exported good 'abrasive' from Canada and India is attached as Annexure-E and El and South India Beach Sand Manufacturer specs report issued by V.V. Mineral as E2. ii) Beach garnet is one of the seven mineral sands viz. Ilmenite, leucoxene (brown Ilmenite), Rutile, Zircon, Sillimanite and Monazite. Since these minerals are always found together in the beach sands of coastal stretches of peninsular India, they are classified as associate minerals and they are often synonymous with the term 'Beach sand mineral' as entire production of these minerals in India is from beach sands occurring on the coast. iii) The exported goods were procured from Rajasthan as may also be seen from procurement invoice, eway bill etc. iv) Rock Garnet Abrasives have absence of heavy minerals such as Ilmenite and Monazite (Uranium and Thorium) components unlike Beach Garnet, and hence merit to be classified differently than Natural Garnet. 2.4. The Notification No. 26/2015-2020 dated 21/08/2018 seeks to regulate export of Beach Sand Minerals only since the said Notification clear....
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....efore, these were appropriately classifiable under the Customs Tariff Heading No. 2513 2030. 3.2 Vide DGFT Notification No. 26/2015-2020 dated 21.08.2018 export of Beach Sand Mineral (in brief BSM) having Ilmenite, Rutile, Leucoxene (Titanium Bering mineral), Zircon, Garnet, Sillimanite and Monazite (Uranium and Thorium) have been placed under restricted category, as vide the said notification, these were brought under STE (State Trading Enterprise) and can be exported only through the canalizing agency IREL (Indian Rare Earth Limited). As the exported goods contain Garnet, the same falls under the restricted category. Further, in the present case, neither the goods were exported through IREL nor under any authorization for export from IREL The said Notification also specifies the CTH of Garnet as 2513 2030. 3.3 The applicant vide their letter ref. No. nil dated 11.12.2019 submitted that prior to DGFT Notification, their material was being exported under HS Code 2513 2030 which is the same as beach garnet, as the product was analysed by its physical properties and its application. However, after the issue of notification, they started addressing it on the name of its applicat....
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.... it out of scope of DGFT notification whose intention is to restrict export of Garnet irrespective of its origin. This notification was issued to regulate exploitation of certain rare earth compounds since it increases the mineral monazite which contains Rare Earth Elements (REEs) such as Uranium and Thorium. DGFT issued this notification on the basis of recommendation of the Atomic Energy Regulatory Board (AERB). The appellant has claimed that DGFT has restricted only the garnet found along beaches and not in inland places, and since their product is manufactured after crushing rocks in Rajasthan, it is not restricted as per the DGFT notification. There is no scientific study to claim that Rare Earth Elements (REEs) are found only in sands found near coasts. On the contrary, there are scientific studies to show that a significant quantity of REEs are found in inland places. This is due to geological reasons i.e. shifting of plates. It is a settled principle of law that in case of any ambiguity, the intention of the law-making body should prevail over any other explanation while interpreting any statute/law. Intention of the DGFT notification becomes more clear for the follow....
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.... are situated inland from modern coastlines. Para 4.4.1 of the paper is reproduced below: 4.4.1. Temporal influence The distribution of ages among REE-HMS deposits reveals a relatively narrow timeframe, primarily forming within the last 66 Myr, during the Cenozoic (Fig. 6b). The Holocene constitutes a significant portion of these recent deposits, with some still actively forming today (Table 1). The prevalence of deposits being exposed and reworked, reinforces this notion (Fig. 6c). However, it is important to note that older deposits represent -40 % of the largest REE-HMS deposits (Table 1). These deposits are commonly located inland from modern coastlines and formed during the Neogene, Paleogene and Cretaceous. This indicates the importance of intraplate tectonics in facilitating the high preservation rate, either within inland seas or amid rapid coastal regression. Para 6 concludes the paper. Relevant portion of the para is reproduced below:- There are 1173 REE-HMS deposits worldwide with various HM assemblages, including ilmenite, rutile, zircon, monazite, xenotime, and garnet. The largest deposits have an average HM grade of 7% (SD = 12) and an....
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....only to circumvent the provision of canalization. The veracity of this OM was got confirmed by the department vide Under Secretary, DAE's letter dated 27.08.2020. (d) PIB released after Union Minister's reply in Lok Sabha in 2022 also makes it clear that Rajasthan is also a source of Rare Earth Elements (in the form of oxides). The Union Minister of State, Earth Sciences informed the following data to the parliament: As on September, 2022, Atomic Minerals Directorate for Exploration and Research (AMD) has established:- • 13.07 million tonnes in-situ monazite (containing -55-60% total Rare Earth Elements oxide) resource occurring in the coastal beach placer sands in parts of Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra and Gujarat and in the inland placers in parts of Jharkhand, West Bengal and Tamil Nadu. • 7,37,283 tonne Rare Earth Elements Oxide (REO) in Ambadungar area, Chhota Udepur district, Gujarat • 36,945 tonnes REO in Bhatikhera area, Barmer district, Rajasthan • 2,000 tonne of heavy mineral concentrate containing -2% xenotime (a phosphate mineral of yttrium and rare earth elements) in the r....
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....e of its origin. The origin of the Garnet in question does not take it out of the scope of the notification issued by the DGFT. Sub-heading 2513 of the tariff is reproduced as under:- 2513 PUMICE STONES; EMERY; NATURAL CORUNDUM, NATURAL GARNET AND OTHER NATRUAL ABRASIVES, WHETHER OR NOT HEAT-TREATED 2513 10 00 - Pumice stone 2513 20 - Emery, natural corundum, natural garnet and other natural abrasives: 2513 20 10 ---- Emery 2513 20 20 ---- Natural corundum 2513 20 30 ---- Natural garnet 2513 20 90 ---- Other A bare perusal of the tariff makes it clear that the tariff also does not distinguish between "Garnet found on beach" and "Garnet found in inland places". Also, when the Garnet has been given a different and specific subheading i.e. 25132030, classifying Garnet as Natural abrasive is incorrect and amounts to mis-declaration. As per the Indian Minerals Year Book, the most prominent use of Garnet is abrasive but when a specific sub-heading is assigned to Garnet in tariff, classifying it under any other sub-heading on the basis of end use is mis- classificatio....
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....arnet but inclusion of garnet within the restrictive notification by way of putting description of the Garnet as a canalised item, the applicant started declaring it differently to escape the scope of the notification. In their letter reference No. Nil dated 11.12.2019, the appellant had submitted that prior to DGFT notification, their material was being exported under HS code 2513 2030 which is a same code as applies to "Garnet". 5.2 We also find that there were two test reports in the matter, the first report being inconclusive, the second, CRCL New Delhi clearly stated that on the basis of Physical, Chemical & XRD analysis, the item was nothing but 'Natural Garnet'. There was no cross-examination sought of the experts, who gave such analysis. We also find that the appellants had also applied for canalising before IREL vide KYC Registration No. IRELOSTIRUPAT059. However, in the instant case, the attempt was made by the party to export the same without involving canalising agency i.e. IREL. Since, the party was in knowledge of the procedures as well as restrictions involved, but they still attempted to carry out the exports undergoing restrictions, therefore, this conduct....