TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 927
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....nal payment was based on final commercial invoice to be issued by the appellant in terms of finally determined quality, quantity etc., in accordance with the contract. The Department, at the time of export, kept the assessment provisional based on provisional invoice furnished by the appellant as also for the purpose of testing certain para-meters like moisture content and Fe percentage. For the purpose of provisional assessment, necessary bond and security as directed by the Department was also executed by the appellant. Subsequently, based on the test report of CIQ at the discharge port and on receipt of final payment based on final commercial invoice issue by the appellant to the foreign buyers, the appellant approached the Department for finalization of their provisional assessment. 3. The Department, in general, calculated the net quantity of export taking into account the moisture content, as determined by their lab i.e. CRCL, based on sample taken at the time of export and thereafter proceeded to examine the final invoice and proof of receipt of payment in the form of Bank Realisation Certificate (BRC). While re-determining the value, they did not dispute the rate per Met....
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.... quantity due to moisture content is of no consequence post 10.10.2007, as old Section 14 covering the valuation of goods for import and export has been rescinded with a new concept of transaction value, wherein, there is a specific provision as to under what circumstances, a transaction value can be rejected and the value for the purpose of payment of customs duty could be re-computed and in what manner. One of the major criteria is to explain the reasons as to the ground for doubting the declared transaction value, as also the rationale and basis for adopting a particular method under Rule 4 or 5 for re-computing the value. Further, when duty is payable on advalorem basis, redetermination of quantity is not required and the final value received towards the consignment from buyer has to be taken as the transaction value. He has also relied on many case laws, including in their own case, decided by this Bench. He is relying on the case of VGM Exports vide Final Order No. A/30317-30324/2024 dated 06.05.2024. He is further submitting that during the export, they had deposited 20% of duty, as additional revenue deposited, to cover any excess duty payment that may become payable on acc....
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....ined by CRCL for the purpose of re-determining the quantity of goods exported. 9. We have perused the relevant contracts covering the exports under different Shipping Bills, where same standard terms and conditions regarding quality, price adjustment for Fe content, bonus / penalty for impurities, payment methods, method of sampling and analyse etc., have been agreed upon. It also, interalia, provides that the weight as determined by the CIQ shall be final and clause 9(a), para 3 of contract further provides that CIQ analysis (for moisture and composition) shall be final. Therefore, what is to be understood that while the price declared at the time export was provisional and was dependent on the mutually agreed terms and conditions between the exporter / appellant and the importer in foreign country after it's analysis at the time of unloading at discharge Port by designated agency (CIQ). We find that Commissioner (Appeals) has gone through each of the parameters declared by the appellant provisionally and the ones adopted by the Adjudicating Authority for computing the total duty payable at the time of finalisation of Shipping Bills. The same is reproduced below for ease of ref....
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....ed for payment, both provisional and final, and basis for arriving at the final price. Therefore, it is obvious that once there is a contract, which is dependent on determination of the net quantity and certain quality parameters in a manner understood to both exporter and importer, the final invoice has to be raised in accordance with the agreed upon terms and conditions and accordingly a final invoice has been raised in this case also and the payments have been received to that extent only as evidenced by the BRC, which is a document which indicates the realisation in terms of particular export consignment under the cover of a particular shipping bill(s). This document, per se, has not been doubted. We also note that in any case, the re-computation of the quantity has got no meaning when the duty itself is on advalorem basis and therefore what is important is to see whether there was any ground for doubting the declared transaction value in the first place or otherwise. In this case, no grounds were existing at the time of declaration, as obviously neither Department nor the appellant were sure about what would be the final price in terms of the negotiated, mutually agreed contra....
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....alue of the consignment exported. Irrespective of the quantity of DMT exported, the fact remains that the appellant has received the export proceeds only for the net quantity shown in their Invoices. Hence, the value for Export Duty has to be taken as per Transaction Value only. Admittedly, as per the Para 11 of the Order-in-Original, the transaction value is not doubted. Hence, even on considering this fact, the impugned order cannot be sustained. 11. We, therefore, find that the issue of modifying or re-determining the quantity in final invoice based on moisture content as per CIQ report, has been followed consistently, especially when the amount received is in accordance with the said quantity in terms of the contract. We also note that great deal of emphasis has been placed on Bond executed by the appellant at the time of provisional assessment. We find that the bond is primarily for binding exporter to pay the differential duty, if any, on final assessment of duty and not for accepting moisture content of CRCL. Therefore, bond and any additional security provided by exporter is essentially for binding him to ultimately pay the amount finally determined but it cannot be cons....
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....required to furnish certain security, as the proper Officer may deem fit, for the payment of deficiency, if any, between the duty as may be finally assessed or re-assessed as the case may be and the duty provisionally assessed. Thereafter, when the duty leviable on such goods is assessed finally, then the amount paid towards the deficiency between the duty provisionally assessed and finally assessed is required to be adjusted against the duty finally assessed first and thereafter, if some amount of duty is still required to be recovered then the exporter is required to pay by adjusting the amount already paid, whereas, if the amount paid is in excess of duty finally assessed, then the said amount will be refunded. Further, Section 18(4) provides, subject to sub-section 5, that if any refundable amount referred to in clause (a) of sub-section 2 of Section 18 is not refunded under that sub-section within three months from the date of final assessment of duty finally, they shall be paid interest on such un-refunded amount at such rate fixed by the Central Government under Section 27(1) till the date of refund of such amount. Therefore, the harmonious reading of the provisions under Se....