The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that not only the moisture content but also the other impurities on account of different minerals also had to be taken into account before arriving at the Ferrum Iron (Fe) value of the iron ore.
Vedanta Ltd, the appellant assessee was exported Iron Ore Fines declaring the Fe content therein to be less than 64% and under seven Shipping Bills exports were completed for different overseas importers.
The assessee appealed against the order passed by the adjudicating authority for confirming the confiscation demand and the option to pay a Redemption Fine of Rs. 1 crore and a penalty of Rs.50,00,000/-.
Mukesh Ladda, the counsel for the assessee contended that at no point in time, the department has questioned the Bank realization certificate submitted by the assessee towards the realization of export proceeds.
Also submitted that the overseas importer had paid higher amounts to the assessee and on higher amounts realized by them, the assessee had calculated the amount of Export duty involved and paid the same and the Export realizations which are based on the Fe value arrived at by the Private Labs, had been duly certified by the Chartered Accountant and they had been enclosed along with the Appeal Paper Book.
Manish Mohan and S. Chakraborty, the counsels for the department relied on the decisions made by the lower authorities and contended that the demand raised by the department was as per the law and liable to be sustained.
The Bench observed that when the iron ore is received at the port, it was in wet condition with moisture and other impurities and the Fe content of Wet Iron Ore was to be taken to arrive at the Fe content of the Dry metric ton as per the formula.
The two-member bench comprising R. Muralidhar (Judicial) and Rajeev Tandon (Technical) quashed the demand along with the penalty and interest while allowing the appeal filed by the assessee.
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