2026-VIL-1390-CESTAT-BLR-CU
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CUSTOMS CESTAT Cases

Customs – Classification and duty rate on Iron Ore Fines export – Determination of Fe (iron) content – Appellant exported Iron Ore Fines via shipping bills declaring Fe content below 62% and paid concessional export duty as per applicable notification – Revenue initiated proceedings for demanding differential duty alleging misdeclaration in Fe content and produced test reports showing Fe content above 62% – Whether determination of Fe content should be based on test reports conducted months after export on dry basis or on condition of goods as exported at the time of shipment – HELD – The issue is no more res integra and settled by Supreme Court judgment in Union of India Vs. Gangadhar Narsingdas Aggarwal wherein it is held that percentage of iron content must be determined in the condition in which goods were exported and duty is relatable to weight of commodity at relevant point of time. Determination of Fe content must be on basis of weight of goods as they existed at time of export and not after ignoring moisture. When goods are tested after considerable lapse of time from export date, moisture content in iron ore gradually evaporates and percentage of iron content would increase, making such delayed test reports unreliable. Test reports conducted on dry basis at considerable time gap after export cannot be accepted as they do not reflect condition of goods at time of export - Appellant had submitted certificates from reputed organizations accredited by NABL which were tested on moist basis and showed Fe content less than 62% at time of export. Test reports from destination port also corroborated Fe content below 62% - Revenue should have accepted test certificates submitted by appellant from recognized testing organizations. Denial of request for re-test was denial of principles of Natural Justice. Assessment should be based on credible test reports corresponding to export goods in condition goods were exported. Revenue has failed to establish that Fe content was above 62% at time of export. Tribunal's earlier decision in Mineral Enterprises Ltd. case on same facts and issues established that test reports should reflect condition of goods as exported – The differential duty demand is not sustainable. The impugned order is set aside and the appeal is allowed
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