2026-VIL-1587-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs - Appellate Procedure - Additional Ground of Law – Appellant exported Iron Ore Fines through Gangavaram Port; assessments were finalized provisionally and then finalized on basis of chemical examination reports treating Fe content on Dry Metric Ton basis - Appellant having accepted the proposed finalization and waived personal hearing challenged final assessments before Commissioner (Appeals) on the ground that Fe percentage should be calculated on Wet Metric Ton basis with reference to total mass including moisture – Whether the Commissioner (Appeals) was justified in rejecting the appeal on the ground that Rule 5 of the Customs (Appeals) Rules, 1982 applies to an additional ground of law raised for the first time in appeal where such ground is based on existing evidence and records – HELD – Rule 5 of the Customs (Appeals) Rules, 1982 regulates production of additional evidence and does not apply to an additional ground of law; the appellant did not seek to introduce any new test report or factual evidence but merely contended that the Fe percentage recorded in the test reports already forming part of the assessment record should be converted and considered on a different basis for determining the tariff entry and rate of duty; such a contention constitutes a legal ground based on existing record and cannot be equated with production of additional evidence; Section 128A(2) of the Customs Act, 1962 specifically enables the Commissioner (Appeals) to permit an appellant to raise a ground not specified in the memorandum of appeal where the omission was not wilful or unreasonable; a pure question of law which can be determined on the basis of facts already available on record may be raised at the appellate stage; the mere fact that the appellant initially accepted the proposed finalization or waived personal hearing does not preclude it from challenging the final assessment through the statutory appeal as there can be no estoppel against correct application of a statutory provision – Appeal allowed by way of remand for fresh consideration - Customs - Export Duty on Iron Ore - Fe Content Determination on Wet Metric Ton Basis – Whether the percentage of Fe content for determining the applicable rate of export duty of Iron Ore should be calculated on Wet Metric Ton basis with reference to the total mass of ore including moisture or on Dry Metric Ton basis – HELD – The percentage of Fe content for determining applicable rate of export duty must be calculated on Wet Metric Ton basis taking into account the moisture content and the condition of Iron Ore as presented for export; after determining the actual quantity of iron, its percentage has to be worked out with reference to the total weight of iron ore available at the relevant time inclusive of moisture; if moisture is excluded while calculating the denominator, the Fe percentage would not represent the condition of the goods as presented for export; the Board has clarified in Circular No. 4/2012-Cus dated 17.02.2012 that for the purpose of charging export duty, assessment of iron ore for determination of Fe content shall be made on Wet Metric Ton basis and not on Dry Metric Ton basis - The basis adopted for determining transaction value under commercial contract and the basis for determining Fe percentage for classification and rate of duty operate in different fields; merely because the contractual price is expressed on Dry Metric Ton basis does not necessarily follow that Fe percentage for tariff purposes must also be taken on Dry Metric Ton basis - The applicable rate of duty has to be determined in accordance with tariff notification, governing statutory provisions and binding judicial precedents – Assessment orders set aside and matter remanded for fresh determination of Fe content on Wet Metric Ton basis.
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