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2022 (9) TMI 545 - Customs
Recovery of Differential duty - export of iron ore fines which are subject to export duty at Rs.300 per MT - Fe content of the iron ore fines less than 62% - mis-declaration to invoke the proviso to section 28(1) of Customs Act - confiscation - redemption fine - penalty - HELD THAT:- It is not in dispute that the appellant was exporting Iron ore fines which are chargeable to export duty at Rs.300 per MT if the Fe content is more than 62%. The first question which must be answered is whether this testing has to be done on dry basis or on wet basis. There will be a difference between the two. If 100 gm of sample (wet weight) has 60 gm of Fe and 10 gm of moisture and 30 gm of other substances, the Fe content will be 60% of the total weight on wet weight. If on the other hand, only dry weight is considered, the Fe content will be 60 gm of Fe in 90 gm of dry weight or 66.6%.
Since the entire demand is based on test report on dry MT basis, which is contrary to the judgment of the Supreme Court in the case of Gangadhar Narsingdas Aggarwal [1995 (8) TMI 73 - SUPREME COURT] and also contrary to the CBEC Circular No.04/2012 dated 17.02.2012, we find the entire basis of demand is not sustainable.
Levy of redemption fine - HELD THAT:- In view of the provisions, if the person does not opt for redemption within a period of 150 days, such option becomes void as per sub-section 3 of section 125 unless an appeal is pending against such order. In other words, the confiscation becomes absolute. In this case, where the goods have already left the country, the person has no reason to opt to pay redemption fine. Redemption cannot be forced on the person.
There is another reason why only goods which are attempted to be exported can be confiscated under section 113 and not goods which are already exported. As per Section 126, on confiscation, unless the goods are redeemed on payment of redemption fine, the property vests with the Central Government and it is the responsibility of the officer, adjudging the confiscation, to take and hold possession of the confiscated goods. In a case where the goods have already been exported, it is impossible for the adjudicating authority to take possession of the confiscated goods. In other words, the officer cannot discharge his responsibility under section 126(2) of the Act. Even for this reason, the confiscation under section 113 and the consequential penalty under section 114 cannot be sustained in this case.
Levy of penalty u/s 114A - HELD THAT:- Section 114A provides for imposing a penalty for short levy or non levy of duty by reason of collusion or any wilful misstatement or suppression of facts by the person who is liable to pay the duty or interest. In this case, we do not find any collusion or wilful misstatement or suppression of facts or even any duty liability because the entire demand has been made only by applying the test reports which are on dry MT basis instead of test reports on wet MT basis in violation of the law.
The impugned order is set aside - Appeal allowed.