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TMI Blog2022 (9) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... ON 23 2. Rule. Respondents waive service. By consent of parties heard finally. A. PRELUDE: 3. This petition under Article 226 of the Constitution of India, inter alia challenges the legality of the General Alert Circular no. 02/2019 dated 12/15th April 2019 (for short, 'GA Circular'), issued by the Directorate of Revenue Intelligence (DRI) and two orders-in-original dated 17.03.2022 and 31.03.2022, passed by the Assistant Commissioner of Customs. The petitioners contend that in passing the impugned orders-in-original, the Assessing Authority has been guided by the GA Circular which, according to the petitioners, is illegal and could not be taken into consideration by the Assessing Officer to pass the impugned orders-in-original to levy customs duty on the export of iron ore as undertaken by the petitioners. It would be relevant to note the prayers in the Writ Petition, which read thus : i. declare that the General Alert Circular No. 02/2019 dated 12/15 April 2019 is illegal, unsustainable and without authority of law; ii. declare that the finalization of assessments of the five Shipping Bills under consideration filed by the Petitioner No. 1 on the basis set out in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2022 viii. Grant ad-interim reliefs in terms of prayer clause (vi) above; and ix. grant such further and other reliefs or directions as this Hon'ble Court may deem fit and necessary in the facts of the present case." 4. At the outset, it needs to be observed that as the challenge raised by the petitioners is also to the orders-in-original against which the petitioners have an alternate remedy of an appeal under Section 129-A of the Customs Act, 1962, a preliminary objection on the maintainability of the petition, on such ground was raised on behalf of the respondent-Revenue. It was hence suggested to Mr. Shah, learned Counsel for the petitioners as to why the issues as raised in the petition cannot be raised in a statutory appeal. Mr. Shah responding to such query, would however submit that this Court ought to entertain this Petition as the petitioners have raised a challenge to the legality and validity of the GA Circular no. 02/2019 on the ground of it being ultra vires to the Constitution, which according to him cannot be decided by the Appellate Authority. Mr. Shah would submit that also the impugned orders-in-original are illegal and ultra vires to the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r more but below 60% Fe kg 10% - -- Iron ore fines (62% Fe or more) 2601 11 31 -- 62% Fe or more but below 65% Fe kg 10% - 2601 11 39 -- 65% Fe and above kg 10% - -- Iron ore Fines (below 62% Fe) 2601 11 41 -- Below 55% Fe kg 10% - 2601 11 42 -- 55% Fe or more but below 58% Fe kg 10% - 2601 11 43 -- 58% Fe or more but below 60% Fe kg 10% - 2601 11 49 -- 60% Fe or more but below 62% Fe kg 10% - 2601 11 50 -- Iron ore concentrate kg 10% - 2601 11 90 -- Others kg 10% - 2601 12 -- Agglomerated : 2601 12 10 -- Iron ore pellets kg 5% - 2601 12 90 -- Other kg 5% - 2601 20 00 - Roasted iron pyrites kg. 5% - The petitioners have classified that the iron ore/ore fines being exported by them under Tariff items 2601 11 21, 2601 11 22, 2601 11 41 and 2601 11 42. 7. The present petition concerns three shipping bills of March 2018 followed by two provisional shipping bills of June 2020 relating to export of iron ore, which were filed by the petitioners under CTH No. 2601 11 21 and CTH 2601 11 22 (iron ore lumps) and CTH 2601 11 41 (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Courts throughout approved the Wet Metric Ton (WMT) method to determine the percentage of iron ore, which included taking into account all the impurities including moisture in the iron ore lump or fines, 10. The petitioners contend that the Assessing Officer, however, did not agree with the petitioners' case that the WMT method needs to be followed. The petitioners contend that the Assessing Officer applied the Dry Metric Ton (DMT) method on the basis that the levy of export duty was required to be made on ad valorem rates of duty. According to the petitioners, the Assessing Officer classified the petitioners' export by applying the Dry Metric Ton (DMT) method whereby the goods were classified under headings CTH 2601 11 29 and CTH 2601 11 49 and not under the headings CTH 2601 11 21 and CTH 2601 11 22. 11. It is the petitioners' case that the impugned orders-in-original as they apply the Dry Metric Ton method (DMT) are ex facie contrary to the law as laid down by the Supreme Court in Gangadhar Agarwal's case, as also they are contrary to the Revenue's own circular dated 17.02.2012. It is the petitioners' case that the orders-in-original are passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ton rate basis to ad valorem basis. It is the petitioners case that such change in the rate of tariff is no justification so as to alter and/or nullify the norms as laid down by the Supreme Court in Gangadhar Agarwal's case which had found acceptance by the Revenue even after the amendment of the Second Schedule of the Tariff Act so as to prescribe levy of duty at the ad valorem rates w.e.f. 13.06.2008. 14. The petitioners have contended that the determination of Fe (iron) content on WMT basis was considered to be an acceptable norm in the prior assessments, which was clear from the fact that by virtue of the Finance Act 2022, for the first time an amendment to the First Schedule to the Tariff Act, has been incorporated by adding a supplementary note in Chapter 26 to the effect that for the products of CTH 2601, the percentage of Fe (iron) content wherever specified, shall be calculated on the 'Dry Metric Ton' (DMT) basis to be effective from 01.05.2022. Hence, according to the petitioners there could not have been any adoption of the DMT method in respect of any assessment for the period prior to 1st May 2022. C. Revenue's Reply Affidavit: 15. A reply/affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has next contended that Section 14 of the Customs Act defines the value in case of export of goods as a transaction value of such goods. This was the reason that the value of the goods in all shipping bills relating to export of Iron Ores declared by the exporters is the value of goods arrived on Dry Metric Ton (DMT) basis. It is contended that in all shipping bills, the quantity of the goods as declared is the weight of the iron ore on dry basis. It is contended that also the unit price of the goods exported is as per DMT of iron ore exported. Therefore, the value of the goods which has been declared in the shipping bill is taken as the transaction value for the purpose of levy of export duty on DMT. It is contended that since the duty is chargeable on ad valorem basis, as the petitioners in their shipping bill have valued the said goods based on Dry (DMT) basis, hence, while calculating the applicability of duty, the petitioners cannot contend that the Fe (iron) content must be calculated on WMT basis and all these issues can be agitated by the petitioners before the Appellate Authority, as the issues raised by the petitioners are required to be examined by the fact finding autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Fe (iron) content, a sample has to be removed for determination of the moisture and the other impurities which are quantified only after testing the sample on DMT basis, as per the procedure laid down in the BIS standard (IS: 436 (Part1/Section I) 1964). It is stated that thus, the decision of the Supreme Court in Gangadhar Agarwal's case is not applicable in the instant case. It is contended that the petitioners cannot randomly pick up the WMT method subject matter of the facts, in the said case so as to avoid payment of legitimate duty due to the Government, which would amount to misleading the Court. It is next contended that the petitioners' contentions to apply the decision of the Supreme Court in Gangadhar Agarwal's case, is unfounded for the reason that the said decision of the Supreme Court was rendered during a regime when the duty was charged on total weight including moisture (WMT), when the Fe (iron) content was to be calculated on the total weight for the levy of duty, however, presently the duty is determined on ad valorem basis. Thus, the decision in Gangadhar Agarwal's case is not relevant to the facts of the present case, inasmuch as the duty tod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Petitioners' Rejoinder Affidavit: 18. There is a detailed rejoinder affidavit filed on behalf of the petitioners, inter alia, contending that in the reply/affidavit, the respondent has proceeded on a fundamentally erroneous appreciation of the scheme of levy and assessment of export duty. The Revenue's contention that the WMT basis of determination of Fe (iron) content as per the decision in the case of Gangadhar Aggarwal, is no longer applicable to the present period of export, is a contention contrary to law and the scheme of levy and assessment of duty. It is contended that the scheme of levy and assessment follows a sequential determination of relevant factors from the moment when the goods are presented for export. It is stated that the process of assessment of export duty on iron ore entails a determination by undertaking different steps as set out in paragraph 5 of the rejoinder affidavit. The second step being the classification of the iron ore under the Second Schedule of the Tariff Act to enable determination of the appropriate headings and subheadings of the classification which establishes whether the goods are taxable and permitted for export. It is conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be assessed by the WMT method and not the "Dry"/ DMT method. (ii) It is submitted that in passing the impugned orders-in- original the Assessing Officer has ignored in its entirety the statutory scheme namely that the classification under the first schedule, which enabled determination of the appropriate subheading of classification, which classification is based on the percentage (Fe) content of the iron ore and it was at such stage it was incumbent for the Assessing Officer to apply the WMT method and such determination leading to an appropriate classification, the applicable/prescribed rate of levy under the second schedule to the Tariff Act was to be applied. (iii) It is his submission that the Assessing Officer has confused the issue of classification by erroneously co-relating it to the basis of levy namely by comparing it on a per ton basis and the ad valorem basis. It is submitted that the respondents have failed to appreciate that for the issue of classification the determination of the (Fe) content was required to be made only on the WMT basis, irrespective of the basis of the levy. (iv) It is submitted that the impugned orders-in-original dated 17 March 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessarily required to be held that the General Alert Circular is illegal and contrary to Section 151A of the Customs Act. It is submitted that to avoid such conflict the Government of India in the Ministry of Finance (Central Board of Indirect Taxes and Customs) had issued instructions No.19/2021(Customs) dated 17 August 2021 clarifying that the Directorates / Commissionerates /audit shall not issue any circular/ report/alert which is in the nature of interpretation /clarification/ prescription so that uniformity of matters covered under Section 151A of the Customs Act is maintained. It is thus submitted that the impugned General Alert Circular in no manner whatsoever can be resorted in adjudication in relation to the levy of duty. (viii) It is submitted that from the reading of the impugned orders-in-original it is clearly seen that the Assessing Officer without referring to the General Alert Circular, has in fact applied the said Circular, which was certainly not applicable in the facts in hand and more particularly when the assessment in question was squarely governed by the norms as recognized by the Supreme Court in Gangadhar Agarwal's case. (ix) It is submitted that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y submission that the petitioners have an alternate remedy available under the provision of Section 129-A of the Customs Act, of an appeal to be filed before the Appellate Authority to assail the impugned order-in-originals. It is her submission that the questions which are raised by the petitioners are all questions of facts which can be effectively dealt only by the Appellate Authority and no case of any extraordinary nature, has been made out by the petitioners that this Court should exercise jurisdiction under Article 226 of the Constitution. (ii) Without prejudice to her preliminary submission Ms. Desai has submitted that the petitioners have filed this petition on a fundamentally incorrect premise, for the reason, that the methodology which fell for consideration of the Supreme Court in Gangadhar Agarwal's case namely that the classification under the First Schedule for determination of the Fe content of the iron ore would be by the WMT test, has ceased to exist, as presently the duties levied are on ad valorem basis and not on a fixed rate per ton as previously imposed. It is her submission that hence it would be not correct for the petitioners to contend that the meth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff Act read with the Schedule thereunder. It is submitted that even from a plain reading of the relevant headings and sub- headings as prevailing in the first schedule to the Tariff Act, there is nothing to infer that the classification had to be on the Wet Metric Ton (WMT) basis. It is submitted that in view of the duty now being required to be levied on ad valorem basis what is relevant is only the iron content and which can be ascertained only by the DMT method. It is on such submissions Ms. Desai would submit that no interference is called for and the petition deserves to be dismissed. G. Discussion and Conclusion: 23. We have heard learned counsel for the parties and with their assistance we have perused the record. 24. At the outset we may observe that the present proceedings concern iron ore being exported by the petitioners out of India, which was subject to levy of export duty, being dutiable goods within the meaning of Section 12 of the Customs Act. For the purpose of levy of duty on export, the provisions of the Customs Tariff Act and the schedules under the said Act became applicable. As noted above, Chapter 26 is the Chapter which deals with the various tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re fines falling under item 29 of the Second Schedule to the Indian Tariff Act, 1934 when exported out of India from so much of the duty of customs leviable thereon under the Indian Tariff Act in the following manner: (a) Where the iron content in such iron ore fines was less than 62 per cent as was in excess of Rs.3/- per ton and; (b) Where the iron ore content in such iron ore fines was 62 per cent or more, as was in excess or more, as was in excess of Rs.4/- per ton. 29. Gangadhar contended that by another notification dated 21.08.1968 the Central Government exempted lumpy iron ore falling under item 28 of the Second Schedule to the Indian Tariff Act when exported out of India, from so much of the duty of customs leviable thereon, as was in excess of duty leviable at the rates specified in the corresponding entry in column 3 of the table which read thus: Sr. No. Description of Article Rate of duty 1 Lumpy iron ore having 60 percent or more but less than 63 per cent of iron content Rs.6/- per tonne 2 Lumpy iron ore having 58 per cent or more but less than 60 per cent of iron content. Rs.5/- per tonne. 3 Lumpy iron ore having less than 58 per cent of iron content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngadhar was considered by the Assistant Collector, Customs and Central Excise, who rejected Gangadhar's claims by different orders. The Assistant Collector was of the opinion that the claim made by Gangadhar and supported by letter of Italab (Goa) Pvt. Ltd., if granted, would lead to an absurd conclusion that the content of iron is dependent on moisture. It was held that moisture not being a component of iron ore cannot be taken into account for determination of iron content. 32. Aggrieved by such decision of the Assistant Collector, Gangadhar carried number of appeals before the appellate authorities, however all these appeals came to be dismissed. The appellate authorities held that the correct method of analysis to determine the grade of iron ore for levy of duty should be the standard method and Gangadhar's contention that percentage of iron ore content should be arrived at in the natural condition had no force. In these circumstances, Gangadhar approached the Bombay High Court in a Petition which was filed on 28.11.1974 praying for a writ of certiorari for setting aside the ten impugned orders, refusing the refund and directing the respondents to return a sum of Rs.3,17,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8%. 35. Gangadhar supported his contention by placing reliance on letter issued by Italab Private Limited dated 30.09.1971 to contend that the iron content on natural basis or moist condition was only 57.23%. The Court observed that it was not in dispute that there was no method or formula to determine the iron content while the goods were in moist condition. The Court also observed that Italab Private Limited had issued a certificate after analyzing the goods as per the Indian Standard formula. It was observed that the Indian Standard methods of analysis of iron ore is a publication by the Indian Standard Institution. The Revenue had relied on paragraph 2.2 of the said publication, which provided preparation of samples. Such paragraph indicated that chemical analysis is possible only after moist sample is dried in an air oven at 105o C to 110o C. The Court also referred to paragraph 4.2 of the said publication, which referred to the method of reporting to say that it is usual practice to report the results of analysis on the dried sample (laboratory sample dried at 105o C to 110o C to constant weight). 36. The Revenue also contended that Italab Private Limited had adopted such f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on the date of the export of the goods, the goods being in moist condition, the weightment included also the moisture and the weightment was required to pay higher rates and therefore, the price of the consignment should be determined on dry tonnage basis. However, such claim of Gangadhar was turned down by Joint Secretary to the Government of India by order dated 06.03.1974 by exercising revisional jurisdiction. The Revenue held that the department was justified in computing the quantity liable to duty in the condition in which the ore is presented to the custom authorities for export and no allowance could be made for the moisture. In such context, the submission was made on behalf of Gangadhar that the Government had accepted one principle while determining the weightment by holding the exporter to the condition of the goods on the date of the export, but a different principle was adopted while determining the customs duty and applying the provisions of the notification. 38. Such case as urged on behalf of Gangadhar was accepted by the Court when it was observed that when the weightment of the exportable goods was made while in the moist condition, then it was difficult to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fines and moist lumpy iron ores exported by the petitioners, and these certificates show that the iron content in these iron ores was to the extent of about 57 per cent. Merely because in respect of moist iron ore the iron content cannot be determined directly by physical analysis this cannot lead to the result that the iron ore content cannot be determined at all or that the petitioners should be deprived of their just claim on that footing which is totally unwarranted by law. The submission of Mr. Rege must, therefore, fail." (emphasis added) 40. The Revenue carried Gangadhar's case to the Supreme Court. The Supreme Court observed that the duty was required to be determined on the weight of the commodity at the relevant point of time, namely, in the case of lumpy iron ore where the percentage of iron was 60% or more but less than 63%, the duty was restricted to Rs.6/- per metric ton; where it was 58% or more but less than 60%, it was restricted to Rs.5/- per metric ton and where it was less than 58%, it was restricted to Rs.4/- per metric ton. It was observed that under both the notifications i.e. notification dated 24.07.1967 and notification dated 31.08.1968, the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1967 issued under Section 25(1) of the Customs Act, the Government exempted iron ore fines falling under Item 29 of the Second Schedule to the Tariff Act when exported out of India from so much of the duty leviable thereon as is in excess of Rs. 3/- per metric ton, where the iron content in the iron ore fines was below 62% and where it exceeds 62% so much of the duty as is in excess of Rs. 4/- per metric ton. By another Notification dated 31st August, 1968 the Government exempted lumpy iron ore falling under Item 28 of the Second Schedule to the Tariff Act when exported out of India from so much of the duty as was in excess of the duty shown in Column (iii) depending on the iron content in the iron ore. It may here be mentioned that the duty had to be determined on the basis of weight of the commodity at the relevant point of time. In the case of lumpy iron ore where the percentage of iron was 60% or more but less than 63% the duty was restricted to Rs. 6/- per metric ton, where it was 58% or more but less than 60% it was restricted to Rs. 5/- per metric ton and where it was less than 58% it was restricted to Rs. 4/- per metric ton. It will thus be seen that under both the Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere possible the view taken by the High Court being a plausible one would not call for intervention by this Court. 42. It is thus clear that the Supreme Court in affirming the view of the learned Single Judge as also the learned Division Bench in the case of Gangadhar Agarwal (supra) has approved the WMT method considering the fact that the goods (iron ore) is required to be considered in its natural form at the time of its export which contain the moisture and other impurities. The following are the principles which can be culled out from the said three judgments in Gangadhar Agarwal's case in regard to the classification of the Fe (iron) content in the iron ore for the purpose of levy export duty:- (i) The iron ore when subjected to export, is exported in its natural condition so as to include impurities and moisture. (ii) It is not in dispute that there is no method or formula to determine the iron contents while the goods are in moist condition. The percentage of iron content in the iron ore is calculated by adopting a certain formula such formula has no scientific backing and the formula is based on approximate conclusion. Such formula is recognized not only in our co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on content cannot be determined directly by physical analysis, this cannot lead to a result that the iron ore content cannot be determined at all or that the assessee should be deprived of its just claim on such footing. (viii) It is immaterial what method one adopts for the purpose of separating the iron content from the lumpy iron ore but the percentage has to be determined from the total weight which was available at the given point of time "after the iron content is determined." This is because the duty is relatable to weight and therefore once the iron content is determined, keeping in mind the total weight, the percentage of iron ore can be determined separating the iron content from rest of the impurities inclusive of moisture and thereafter to be ascertained in which category the lumpy iron ore would fall for the purpose of charging duty under the Tariff items/notification. (ix) The percentage of iron ore content is determined after ignoring the moisture, the percentage would not be relateable to the lumpy iron ore weighed at the relevant time for the purpose of charging duty. 43. Having noted the above principles as culled out from the said three decisions in Gangadha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iron ore is dried at a temperature of 105o C to 110o C, and by such process, the impurities/moisture are weeded out. This can happen only in a laboratory, on a sample of iron ore being submitted for such analysis. Thus, when the iron ore is dried in the laboratory, it is certainly not in the natural form, that is containing moisture and other impurities. It is in these circumstances, a well established method of determining the percentage of Fe (iron) content, when the iron ore is in such original (natural) condition, namely, containing moisture and other impurities, by applying the wet (WMT) method, the percentage of iron content is determined essentially for the purposes of sale and purchase. It is for such purposes, for determination of the iron content in relation to the export of iron ore, a mathematical formula being universally recognized is being followed for determination of the iron content in the natural lumpy iron ore or the iron fines. Thus, it appears that there was never a confusion in determining the iron content by two different standards, firstly, a standard whereunder by applying the wet (WMT) method the iron content in the iron ore for the purpose of classificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d valorem basis w.e.f. 13 June 2008, there is no denial that the department was consistently following the basis of determination of the Fe (iron) content by the Wet (WMT) method as recognized and approved by the Supreme Court in Gangadhar Agarwal's case. 49. Moreover, we find that there is a reason for the Revenue to do so inasmuch as when the legislature has found it appropriate that the goods are required to be classified on dry weight basis, it has been accordingly categorically provided for in the relevant schedule under the Tariff Act. This is clear from the fact that the iron ore as categorized under 2601 and the sub headings thereunder, there is no mention whatsoever of any "dry weight" as being canvassed on behalf of the Revenue. However, comparatively if the immediate heading 2602 under which "manganese ores" have been classified, there is a specific inclusion of a dry weight method. It is necessary to extract heading 2602 pertaining to the manganese ore, which reads thus: 2602 Manganese ores and concentrates, including ferruginous manganese ores and concentrates with a manganese content of 20% or more, calculated on the dry weight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid discussion, in our opinion, would show that the Wet method necessarily was applicable till 1 May 2022. The Dry Metric Ton (DMT) basis cannot relate back to any assessment which pertains to the period prior to the amendment, taking effect. Thus, in passing the orders-in-original in question, which pertain to a period prior to 1 May 2022, the Assessing Officer was bound to follow the wet (WMT) method and not otherwise. 52. Insofar as the applicability of the GA Circular no. 2/2019 dated 12/15 April, 2019, issued by the DRI is concerned, in our opinion, the Assessing Authority is required to be consistent in its approach. Insofar as the applicability of the Circular is concerned, the Revenue had taken a categorical position in Vedanta Ltd., Thr. Its Aut. Sign. Benicio Menezes vs. Union of India, Thr. The Secretary, Dept. of Revenue, Ministry of Finance, Govt. of India Stamp Application Main No. 1721 of 2020 (F) decided on 16 September 2022, decided by a co-ordinate bench of this Court in which the assessment was in relation to the export bills which were of the year 2018. In such context, the Revenue took a categorical stand before this Court that, the assessment would be u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... har Agarwal's case were in regard to classification of the iron ore under heading 2601 for the purpose of determination of export duty on iron ore being on the wet (WMT) method basis and the dry (DMT) method would be applicable with effect from 1 May 2022 by virtue of the Finance Act, 2022. 54. In our above discussion, we have dealt with the primary concern of the petitioners in regard to the applicability of the principles insofar as the method of classification relevant to the assessments in question was required to be applied in determination of the duty levy on iron ore falling under heading 2601 on the touchstone of the law as laid down by the Supreme Court in Gangadhar Agarwal's case. We are thus not persuaded to accept Ms. Desai's contention, that the Dry weight method would be required to be applied to the assessments in question on account of a change in the rate of Tariff w.e.f. 13 June 2008 namely, that now the rate prescribed is on ad valorem basis, and for such reason, the decision of the Supreme Court in the Gangadhar Agarwal's case, is not applicable. As observed by us above, the change from the rate per metric ton being modified to ad valorem, in our op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Supreme Court in Gangadhar Agarwal's case for determination of the iron ore content on the Wet method (WMT) basis in regard to the period prior to 1st May 2022. 57. We may also observe that after the introduction of the ad valorem basis in June 2008 the Revenue through its Senior Technical Officer, Tariff Unit, by a Circular dated 17 February 2012, addressed to all the Chief Commissioners of Customs and other officials, has recorded in regard to uniformity to the customs procedure for calculating the content of iron ore and has set out a clarification in that regard, to apply the law as laid down by the Supreme Court in Gangadhar Agarwal's case. The contents of such communication are required to be noted, which read thus : Circular - Customs CIRCULAR NO. 04/2012-Cus F. No. 450/93/2011-Cus.IV Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Customs-IV Section ********** New Delhi, 17th February, 2012 To All Chief Commissioners of Customs, All Chief Commissioners of Central Excise, All Director Generals/Chief Departmental Representatives (CESTAT) All Commissioners of Customs, All Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t so as to maintain uniformity all over the customs. It is clarified that for the purpose of charging the duty, the assessment of iron ore for determination of Fe (iron) content shall be made on Wet Metric Ton (WMT) basis. There is some confusion created in the wordings as underscored by us in paragraph 3 of the Circular (supra) when the Revenue further clarifies to say that, "in other words, it means deducting the weight of impurities (inclusive of moisture) out of the total weight/gross weight to arrive at Net Fe(Iron) contents." We may at the outset endeavour to remove any such ambiguity, as created by observing that the Circular has clearly observed by quoting the relevant extract of the decision of the Supreme Court to state that the Wet Metric Ton (WMT) becomes applicable. The Circular has not stated that it is the Dry Metric Ton (DMT) method, which would become applicable. In any event, such a confusion ought not to arise in view of the clear position in law as laid down by the Supreme Court in Gangadhar Agarwal's case and the consistent practice being followed by the Revenue following such decision till the introduction of the recent amendment as brought about by the Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the Fe content of Dycc report on dry basis as given below Table - X." (emphasis added) 61. It is thus clear that the Assistant Commissioner in passing the impugned orders in accepting the dry method, has acted contrary to the settled principles of law as laid down by the Supreme Court in Gangadhar Agarwal's case. It cannot be countenanced that any Custom Authority would act contrary to the law as laid down by the Supreme Court as discussed above. The principles of law in that regard are well settled in the case of Union of India vs. Kamlakshi Finance Corporation Ltd. 1992 Supp (1) SCC 443. In these circumstances, the orders-in-original cannot be sustained being contrary to the basic tenets of law as laid down by the Supreme Court in Gangadhar Agarwal's case. We would be accordingly required to quash and set aside the impugned orders-in- original. 62. Before parting, we may note that although the decisions in regard to the position in law on the binding force of the decisions of the Supreme Court are cited by Mr. Shah, we have thought it appropriate not to burden the judgment as these decisions reiterate the principles of law which are well settled, that decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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