TaxTMI 
TaxTMI 
2025 (8) TMI 576
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....pro rata basis. 2.1. On the basis of the sales contract dated 20.04.2022, the appellant had exported 59605 WMT of iron ores vide Shipping Bill No. 250285 dated 28.04.2020 which was provisionally assessed under Section 18 of the Customs Act, 1962 and paid customs duty amounting to Rs. 8,38,86,437/- vide challan no. 78796 dated 29.04.2020. 2.2. Thereafter on the basis of a load port report analysis dated 14.05.2020 from M/s. Mitra SK which certified that the Fe content in the exported iron ores is 60.13% and the original sales contract dated 20.04.2022, the Appellant prepared a provisional commercial invoice dated 15.05.2020 wherein the transaction value of exported iron ore was reflected as USD 39,73,365.61/-. The appellant filed a shipping bill reflecting this amount which was provisionally assessed by the department. 2.3. Upon receipt of the export consignment, the foreign buyer carried out sampling of the exported iron ore fines. The Fe content in the iron fines was determined as 58.17% as per the sampling report at the discharge port. 2.4. On account of such variation, the original sales contract dated 20.04.2020 was re-negotiated and modified vide an addedum dated 3....
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.... IS THE PRICE ACTUALLY PAID AS EVIDENCED FROM THE BANK REALISATION CERTIFICATE (i) The appellant submits that the final assessment order dated 07.10.2021 had rightly determined the transaction value of the export consignment in accordance with Section 14 of the Customs Act. (ii) In the present scenario, although the original contract agreed between the parties stood at USD 74.25 for supply of iron ore having 60.5% Fe content. However, such price was subject to negotiation and re-determination if the Fe content fell below 59.5% [as per Clause 5 of the contract]. In the present case, based on the discharge port report (as prepared by the customs authorities of the foreign port), it was found that the Fe content in the export consignment is only 58.17%. (iii) Accordingly, due to such decrease in Fe content an addendum was added to the original sales contract where it was agreed upon that Fe content in the iron ore fines would be 57% and base price for such iron ore fines would be USD 58. (iv) The appellant further submits that vide such addendum it was further agreed upon that the final payment shall only be made on the basis of weight of the consig....
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....alization of assessment under Section 18(2) of the Customs Act, additional duty was confirmed upon the assessee on the ground that duty liability is to be discharged on the basis of load port report analysis. However, on appeal by the assessee, the lower appellate authority directed that final assessment should be on the basis of final invoice and BRC. (x) Further the appellant relies on the following judgements which have conclusively upheld that transaction value shall be determined on the basis of final invoice and BRC: • Essel Mining & Industries Ltd Versus Commissioner of Customs Central Tax [2025 (7) TMI 1725 - CESTAT HYDERABAD] • CC, Visakhapatnam Versus Rashmi Metaliks Ltd. - [2016 (11) TMI 300 - CESTAT HYDERABAD] • Daksh Minerals and Marine Pvt. Ltd. Versus Commissioner of Central Tax Guntur - GST [2024 (5) TMI 1155 - CESTAT HYDERABAD] (xi) The appellant further places reliance upon M/s Choudhary Ship Breakers v. Commissioner of Customs [2013 (11) TMI 1228-CESTAT Mumbai], wherein the original contract entered between the parties was re-negotiated and accordingly, the value of the contract was lowered from US $ 992887....
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....knowledge/presence of the department. (iii) The appellant submits that the facts of M/s. Steer Overseas Pvt Ltd. (Supra) is distinguishable from the facts herein as in the present case the issue is limited to determination of value of exported goods on account of amendment to the subject contract. (iv) Furthermore, in the present case the terms of the contract (as amended) specifically provides that discharge port report should be considered over and above other test reports. (v) Without prejudice to the above, it is submitted that since discharge certificate is prepared by the customs authorities of the foreign buyer, it is impractical that sample for such preparing such report would be drawn in presence of the Indian customs authorities and the exporter. Moreover, requirement for withdrawal of sample in presence of exporter's representative is applicable only with respect to test undertaken within the territorial limits of the India and such directions cannot be enforced upon Customs Authorities of a foreign country. (vi) Therefore, in view of the above-made submissions the Appellant humbly submits that the Ld. Commissioner (Appeals) has wr....
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....ch a scenario the Appellant would have naturally charged the foreign buyer a higher rate for export of better quality of iron ore. (vi) However, in the present factual scenario, the original contract was amended only because it was found that the iron ore content in the goods exported by the Appellant is not as per grade as agreed between the parties originally and therefore two independent unrelated parties renegotiated the payment terms of the consignment. (vii) It is submitted that a contract should be read in entirety so as to determine true essence of the agreement and the intentions of the parties. In the present case, the Original Sales Contract dated 20.04.2020 read with addendum dated 30.06.2020 to such contract, reflects that due to supply of inferior/lower quality of iron ore the contract was amended to adjust the price variation. Thus, accordingly rejection of the transaction value as determined in the final assessment order is not sustainable and the impugned order is liable to be set aside for this reason also 7. On the other hand, the Ld. Authorized Representative of the Revenue supported the impugned order. 8. Heard the parties and considered....
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....the Final Assessment Order dated 07.10.2021, found that the Discharge Port Report showed the Fe content of 58.17 % and that the Final Invoice had been raised as per the contract between the exporter and the overseas buyer. It was also noticed that the amounts remitted against the subject consignments were in conformity with the Final invoice raised on the foreign buyer based on Discharge Port Certificate. However, we find that these facts have not been disputed by the Ld. Commissioner (Appeals) in the impugned order. Therefore, in these circumstances, we find that the Ld. Commissioner (Appeals) has gone beyond the law laid down by way of various judicial pronouncements. 10. In this regard, we take note of the fact that the said issue has been examined by the Tribunal in the case of Commissioner of Customs (Export), Goa v. V.G.M. Exports [2013 (291) E.L.T. 572 (Tri. - Mumbai)] wherein it was observed as under: - "6.1 Section 14 of the Customs Act, 1962 stipulates that for the purpose of the Customs Tariff Act, "the value of the exported goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for expor....