Relevant Date for Export Duty is Date of Let Export Order, Not Loading Date: CESTAT in Bharat Mines Case [Read Order]
CESTAT rules that the relevant date for determining export duty is the date of the Let Export Order, not the loading date, setting aside the differential duty demand
Export, CESTAT Chennai, Bharat Mines Case,
Export, CESTAT Chennai, Bharat Mines Case,
The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the relevant date for determining the rate of export duty is the date on which the Let Export Order (LEO) is issued by the proper officer and not the date when the loading of goods begins.
Bharat Mines and Minerals, the appellant, is a partnership firm engaged in the mining and export of iron ore. The department demanded differential duty based on a change in the export duty rate introduced through Notification No. 79/2008-Cus., dated 13.06.2008, arguing that the loading of goods took place after the new rate came into effect. The adjudicating authority confirmed the demand and imposed penalties.
The appellant’s counsel argued that the Let Export Order was issued on 09.06.2008, before the change in the rate of duty on 13.06.2008. They argued that under Section 16(1)(a) of the Customs Act, 1962, the rate of duty applicable is the one prevailing on the date the proper officer issues the LEO under Section 51, and not the date when the goods are physically loaded.
The counsel relied on the decision of the Bombay High Court in Narayan Bandekar & Sons Pvt. Ltd. v. Commissioner of Customs (2010), which held that the relevant date for determining export duty is the date of the LEO.
The revenue counsel supported the findings of the adjudicating authority and submitted that since the actual loading of goods occurred after 13.06.2008, the new rate of duty should apply.
The two-member bench comprising Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) observed that under Section 16(1)(a) read with Section 51 of the Customs Act, the applicable rate of duty must be determined based on the date of the LEO, which is the date the proper officer permits clearance and loading of goods for export.
The tribunal explained that the date of actual loading is not relevant for determining the duty rate. The tribunal pointed out that in this case, the LEO was granted on 09.06.2008, before the new notification took effect on 13.06.2008, and the revised rate could not apply.
The tribunal explained that the demand for differential duty based on the later notification was unsustainable. The appeal was allowed, and the demand and penalties were set aside.
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