2026-VIL-867-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs - Classification of Mixed Iron Ore Consignments - Appellant exported iron ore consignments containing a mixture of iron ore fines and iron ore lumps declaring certain parameters including Fe percentage and moisture content at the time of export under self-assessment - Department subsequently received final invoices and analytical reports from the discharge port showing variations in the declared parameters and sought to reassess the shipping bills - Whether export consignments having a mixture of iron ore lumps with predominantly iron ore fines can be separately segregated to apply different rates of duty, or whether the entire consignment must be treated as iron ore fines – HELD - The mixed consignments of iron ore fines and lumps cannot be separately segregated to apply different rates of duty. The entire consignment has to be treated as iron ore fines and the applicable rate of iron ore fines must be applied for charging export duty. This principle is based on Rule 3(b) of the General Rules of Interpretation and is consistent with settled precedent established by coordinate benches - The demand of differential based on treating certain quantities as iron ore lumps attracting higher duty rates is set aside – The appeal is allowed by way of remand - Determination of Export Duty Based on Declared Parameters - The appellant initially exported goods under self-assessment declaring certain Fe content and moisture content based on provisional invoices. The Department later sought to redetermine the duty based on Fe content and moisture percentage as determined by authorities at the discharge port, which differed from the initially declared parameters - Whether in the case of self-assessed (finally assessed) shipping bills based on provisional invoices, the Department can resort to redetermination of export duty based on parameters determined at the discharge port instead of the parameters declared at the time of export – HELD - For moisture content, the declared moisture content at the time of export must be taken and any variation in quantity due to moisture content has no significance when duty is charged on an ad valorem basis. The Fe content must be taken as declared at the time of export since the assessment is final and self-assessed. However, where a contract explicitly permits determination of Fe content at the discharge port, the CIQ report parameters may be considered - Export Duty Value Based on Final Invoice and Bank Realization Certificates - Whether the assessable value in self-assessed exports can be redetermined based on final invoice value and bank realization certificates instead of the value declared at the time of export – HELD - The assessable value must be determined based on the value declared at the time of export, and bank realization certificates alone cannot be used to redetermine the assessable value. The fact that bank realizations do not match the full invoice amount does not justify adopting the BRC value as the assessable value for duty purposes. The declared amount must be taken as the assessable value so long as there is no allegation or evidence of receipt of additional consideration or the invoice being not genuine - The reassessment based on final invoice value or actual bank realizations is not permissible - Invocation of Extended Period and Imposition of Penalty - Whether the extended period of reassessment is invokable and penalties are imposable when there is misdeclaration of parameters at the time of export which came to the knowledge of the department only after receiving final invoices and discharge port reports – HELD - The extended period of reassessment is invokable when there is clear misdeclaration at the time of export in respect of certain parameters which came to the department's knowledge only when final invoices or relevant reports from the discharge port were submitted. There is deliberate withholding of information regarding the provisional nature of invoices and parameters subject to variation, which constitutes a wrong declaration. The extended period becomes invokable on these grounds, and penalties are justified. The matter is remanded to the adjudicating authority to redetermine the differential duty if any
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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