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TMI Blog2024 (4) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant and the foreign purchaser is part of the record. In pursuance of the said contract, the appellant exported 55,000 Wet Mt of "Metallurgical Grade Gibbsitic Bauxite of Indian Origin" from Porbandar Port under the provisional invoice dated 27.02.2013 and Shipping Bill No. 000126 dated 27.02.2013 and customs duty to the tune of Rs. 93,12,977/- also came to be paid by the appellant on the FOB value indicated in the said documents. The FOB value of the said consignment was calculated on the basis of weight of the consignment in Wet metric tonne instead of its weight in Dry Metric Tonne basis, as agreed to under, the terms of the subject agreement and which weight became available later. Moreover, instead of export of 55,000 Wet Metric Tonne of bauxite, the appellant actually shipped only a quantity of 54,600 Wet metric tonne and therefore, there was a short shipment of 400 mt of bauxite in the said consignment. This short shipment was duly certified vide the Short Shipment Notice No. 54 dated 08.03.2013 issued by the Superintendent of Customs, Porbandar. Thus, on account of aforesaid errors, excess customs duty came to be discharged by the appellant in the export of aforesaid con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from gross violation of principles of natural justice in as much the basis on which the refund of Rs. 12 ,66,148/- has been held to be unsustainable has never been put to the appellant and therefore, the appellant was never in a position to explain or justify the eligibility of refund claim of Rs. 12 ,66,148/.It is a undisputed fact on record of the case that the adjudicating authority had clearly overlooked the refund claim to the extent of Rs. 12 ,66.148/- The appeal was filed by the appellant before the appellate authority raising grievance of non-consideration of part of refund claim filed by the appellant and therefore, the sole issue before the appellate authority was whether the refund claim of Rs. 12,66,148/- was considered by the adjudicating authority or not. Moreover, it is also a matter of fact on record that no show cause notice has ever been issued to the appellant raising dispute regarding the eligibility of the refund claim filed by the appellant. In this scenario, the Commissioner (Appeals) had no jurisdiction to unilaterally reject the refund claim of Rs. 12,66,148/- without putting the appellant to notice of the grounds and objections relied upon by the appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made reference to the initial invoice issued by the appellant. The shipping bill dated 27.02.2013 for the concerned transaction and concluded that as the initial supply was supposed to be 55000 MT and in view of the short shipment notice of 400 MT, the appellant was required to discharge duty for the-54600 MT supplied by them. However, there is a glaring error in the said logic of the appellate authority because the excess payment of duty was not only attributable to the short shipment of 400 Mt but was also attributable due to the weight difference on the basis of moisture content of the consignment. In terms of the agreement between the appellant and their foreign purchaser, the value of consignment supplied to the foreign purchaser was required to be calculated in terms of its Dry Metric Ton weight and accordingly, even the customs duty was required to be discharged by the appellant on such value. However, at the time of export of the subject consignment, the appellant mistakenly recorded the Wet Metric Tonne weight of 55,000 Mt of Bauxite in their provisional invoice. This error was also incorporated in the shipping bill and accordingly, the appellant erroneously discharged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of making application if the claim was ultimately paid by the Department irrespective of the reasons for which the claim for refund was not paid within three months from the date of receipt of application. Therefore, appropriate order for paying interest on refund of Rs. 12,66,148/- is also required to be passed in this appeal. The reasons and basis on which the refund claim of Rs. 12,66,148/- has been rejected was never put to the appellant for their expiation. 5. During the course of hearing while pleading for the above grounds of appeal, the advocate for the appellant made following further submissions, both on merits as well as alternatively on the point of need to follow principles of natural justice and reasoned order in the matter. The advocate for the appellant relies on the following judgments, inter alia to emphasise that transaction value in case export of goods has been accepted to be for the weight as found at the port of disembarkation and therefore transaction value has to be construed accordingly and refund allowed to them. M/s. ORE CAST (INDIA) V/s. COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & S. TAX, BBSR-I AND COMMISSIONER OF CUSTOMS (PREVENTIVE, BHUBANESWAR V/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to justify the impugned order. 7. Considered the adversarial submissions. The Court in this case finds that goods i.e "Metallurgical Grade Gibbstic Bauxite of Indian Origin" were exported from port in India and the goods were described on the basis of invoice dated 27.02.2013 from Porbandar port. And Customs Duty was discharged on the basis of FOB value indicated in the export documents. The duty discharged was not as per Dry Metric Tonnage basis. it was as per the contract that the quantum of weighment between the Indian Exporter and Foreign Importer at port of discharge quantity (on the Dry Weight basis) after giving weightage for moisture content (that was found to be 11.45%) by M/s. SGS technical consultant engaged by both parties under the contract that was to be the basis. Therefore instead of initial shipped quantity from the port of embarkation i.e. Porbandar of 54,600 of "Metallurgical Grade Gibbstic Bauxite of Indian Origin", quantity of 48372.209 MT was found alone after reduction of stated moisture content by Agency of SGS. It is to be noted that description given in various documents in the port of export was "Metallurgical Grade Gibbstic Bauxite of Indian Origin". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e indicate that the buyer has right to reject the shipment if moisture content certified by SGS India Pvt. Ltd., is found to be over 10% from of what is declared at the load port i.e. Porbandar in this case. In the case, of Ore cast (India) (cited supra), it was held that once the price is reworked on the basis of Ferrous content, export duty to be paid also becomes re-workable. And appellant exporter becomes eligible for the refund, consequent to such testing and reworking of price at the port of discharge. This Court finds that in the present case in the transaction of exports of goods at the time of export same were described "Metallurgical Grade Gibbstic Bauxite of Indian Origin" and the price was indicated in the shipping bills and assessment of duty was done as per shipping bill dated 27 February 2013. The definition of export goods and export has been given in Section 18 and Section 19 of the Customs Act, 1962 reads as follows:- (18)"export", with its grammatical variations and cognate expressions, means taking out of India to a place outside India; (19)"export goods" means any goods which are to be taken out of India to a place outside India;" 7.1 The transaction val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng India) in the case of export goods and such value commonly taken as FOB value. Under the circumstances, the goods exported were as per above description of "Metallurgical Grade Gibbstic Bauxite" and goods were assessed in the country of exportation as per the price initially agreed. The goods remained in the sea and were during the shipment exposed to moisture. The moisture over and above permissible was found at the port of discharge and price was renegotiated and the fresh price was arrived at to avoid termination of contract due to slightly higher moisture content. Situation to that extent was similar to the contract of M/S. ORE CASE (INDIA) V/S. COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & S.TAX, BBSR-I AND COMMISSIONER OF CUSTOMS (PREVENTIVE), BHUBANESHWAR reported in 2023 (10) 757 - CESTAT KOLKATA. Excepting that instead of humidity element it was ferrous content in that case. It is to be noted in that case, it is on record that assessment at the time of exportation was on provisional basis and subjected to the final outcome of ferrous contents. The ferrous contents in any case cannot be different, in normal course at either of the ports of export and import. However, in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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