Custom, Excise & Service Tax Tribunal
Steelco Gujarat Ltd vs Ahmedabad on 18 October, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
West Zonal Bench AHMEDABAD
COURT NO. I
Appeal No. C/41/2010 -DB
[Arising out of Order-in-Appeal No OIA-204/2009/CUS/COMMR-A-/AHD dated
26.10.2009 passed by Commissioner (Appeal) Customs, Ahmedabad]
M/s. Steelco Gujarat Limited : Appellant
vs.
Commissioner of Customs, Ahmedabad : Respondent
Appearance:
None for the Appellant Shri S.N. Gohil, Superintendent (AR) for the Respondent CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Hon'ble Mr. Raju, Member (Technical) Date of Hearing/ Decision : 18.10.2018 Final Order No. A/12249 / 2018 Per : Ramesh Nair The brief facts of the case are that appellant have exported cold rolled galvanized non alloy corrugated steel sheets of zink coating and flat rolled products of iron or non-alloy steel, cold rolled, not clad, plated or coated products falling under CTSH 7214/7209 against six shipping bills filed at ICD, Dashrath, Vadodara for which Let Export Order was issued on 10.05.2008. Vide Notification No. 66/2008-Cus dated 10.05.2008 export duty at the notified rate was imposed on the subject goods. As no duty was paid at the time of export, show cause notice dated 24.07.2008 was issued 2 Appeal No. C/41/2010 to the appellant which culminated into the adjudication order whereby demand of customs duty amounting to Rs. 32,66,712/- along with interest was confirmed. A penalty of Rs. 5,000/- was imposed on the appellant under Section 117 of the Customs Act, 1962. Against the said order, the appellant filed appeal before the Commissioner (Appeals) which came to be rejected and the order-in-original was confirmed except for setting aside the penalty imposed under Section 117. Being aggrieved by the order-in-
appeal the appellant filed the present appeal.
2. When the matter was called, none appeared on behalf of the appellant. It is observed that on earlier date also the appellant had taken adjournment therefore, we proceed to dispose of the appeal on merits, on the basis of available record.
3. Shri S.N. Gohil, ld. Superintendent (AR) appearing on behalf of the Revenue reiterated the findings of impugned order. He submits that the date of export is the date of let export order therefore, the notification issued on 10.05.2008 imposing export duty is applicable on the date of let export order. He placed reliance on the following judgments:-
(a) Commissioner of Central Excise, Goa vs. Fomento Resources Pvt.
Limited - 2017 (357) ELT 304 (Tri. Mumbai)
(b) Jindal Saw Limited vs. Commissioner of Customs (Export), Mumbai - 2012(280) ELT 135 (Tri. Mumbai) 3 Appeal No. C/41/2010
(c) Narayan Bandekar & Sons Pvt. Limited vs. Commissioner of Cus. & C.Ex. Goa - 2010 (259) ELT 363 (Born.)
(d) Union of India vs. Asian Food Industries. - 2006 (204) ELT 8 (S.C.)
(e) Pailava Mineral Limited vs. Union of India -2001 (127) ELT 19 (Mad.)
(f) Jasraj Jethamal vs. Assistant Collector of Customs - 1994 (74) ELT 819 (Guj.)
4. We have carefully considered the submissions made by ld. AR and perused the record. As per the submissions made by the appellant in their appeal, their only stand is that since shipping bill was filed on earlier date but it is due to the delay by the Customs, the export has taken place on 10.05.2008 and therefore the appellant is not responsible. This plea of the appellant will be of no help as there is no relaxation provided in the law for delay in export as regard levy of export duty. As per the Notification No. 66/2008-Cus dated 10.05.2008, the export duty was levied with effect from 10.05.2008 and the export has also taken place on 10.05.2008, as per the let export order. Therefore, the export duty is very much payable on the said export. This issue has been decided by this Tribunal in the case of CCE, Goa vs. Fomento Resources Pvt. Limited (supra) wherein the bench has passed the following judgment:-
"5. The learned Counsel for the respondents argued that the permission under Section 51 is granted to them every day the physical loading is done. He pointed out that in the check list of the shipping bill it can be seen that such permission has been granted on each day when loading has taken place. Thus rate applicable on each day of loading will be applicable to the material loaded on that day since for each loading a separate permission of loading is granted. He argued that in such circumstances the enhanced rate of duty would be applicable only to the consignments loaded after the issue of notification enhancing the rate of duty as only in such cases the permission for loading under Section 51 was granted after the issue of notification. He argued that enhanced rate of duty cannot be applied to the material loaded prior to the issue of 4 Appeal No. C/41/2010 notification enhancing the duty as in this case the permission under Section 51 of the Customs Act was granted prior to the issue of notification. He argued that the Commissioner (Appeals) has rightly allowed their appeals.
5.1 He argued that the endorsement on the check list for export reads as follows :
"Inspected the lot of 20,000 MT of iron ore fines at bank stream in barges. Examined the same superficially checked the desp. and quantity as per invoice and other related documents, RSS will be drawn in triplicate as per ISI specifications by recognized sampler in presence of CHA/exporter under customs supervision and the same will be forwarded to Dy. CC for test".
Under this endorsement there is a remark "passed for shipment" of the Preventive Officer. He pointed out that this kind of endorsement was made separately on each day when the loading has happened. The learned Counsel argued that this is in fact the permission under Section 51 of the Customs Act and can be called a let export order. 5.2 He argued that there is no bar on granting such permission under Section 51 or the 'let export order' for part consignment and he relied on the decision of the Tribunal in the case of Kineta Minerals & Metals Ltd. - 2009 (241) E.L.T. 416 (Tribunal). He particularly relied on Para 6 of the order which reads as follows :
The Customs procedure is like this. In case 6. of export of the goods, the export manifest is filed prior to the departure of the vessel in terms of Section 41 of the Customs Act. The said manifest contains all the goods which are in the ship and to be exported. In terms of Section 31, loading of the export goods will be done only after the grant of entry outwards and no export goods shall be loaded unless the shipping bill is passed by the proper officer and unless the goods are handed over to the Master of the vessel. We have already seen that Section 51 provides that when the proper officer is satisfied that an entry made under Section 50 is correct and exporter has paid the duty, if any assessed, then he may make an order permitting clearance and loading for exportation. We also note that the order under Section 51 is a composite order permitting clearance and loading of the goods for export. Once that order is given, the relevant date in terms of Section 16 is the date of that order. Just because the loading is not completed or in process, there was change in the rate of duty, it does not mean that the earlier order permitting clearance and loading of the goods for export becomes null and void and the new rate would be applicable. That is not there in the Scheme of the Customs Act. What is relevant is that the date of assessment of the shipping bill. The assessment has been done prior to the imposition of Export duty, i.e. on 1-3- 2007 and the duty/cess determined in this case has already been collected prior to 1-3-2007. Nothing can prevent for the export of the consignment and the later changes in the rate of duty would not be relevant. In view of this, we do not find that the impugned order is legal and proper. In fine, we are of the view that of the entire quantity covered by the two shipping bills, no export duty would be leviable as the order permitting clearance and loading has been done even prior to 1-3-2007 which is prior to the imposition of Export duty. Hence in terms of Section 16 of the Customs Act, in the present case, the rate of duty and valuation would be only as on the date of order permitting clearance and loading under Section 51 of the Customs Act, 1962. Any change subsequent to the date of order under Section 51 would not be applicable to the consignments in question. Hence we allow the appeal with consequential relief.
5.3 The learned Counsel further argued that each permission for loading granted on the checklist of shipping bill is valid permission under Section 51. In this regard he 5 Appeal No. C/41/2010 referred to [Regulations] 5 and 6 of the Shipping Bill (Electronics Declaration) Regulations, 2011 which reads as follows :
The checklist together with the supporting "5. export documents and challan evidencing payment of duty and/or cess, if any, shall be presented to the proper officer of customs for making an order permitting clearance, for loading of goods for exportation, after examination of the export goods if so required.
After making an 6. order under regulation 5 the proper officer shall generate the original (customs copy), exporter's copy exchange control copy and the export promotion copy of shipping bills".
The learned Counsel argued that let export order on each consignment of the shipping bill is necessary otherwise the goods will be liable to confiscation under Section 13 of the Customs Act. He pointed out that the goods loaded in vessel without a let export order have been held to be liable to confiscation and penalty in the following cases of Saurashtra Cement Ltd. - 2013 (298) E.L.T. 580 and Nichrome India Ltd. - 2010 (251) E.L.T. 147.
5.4 The learned Counsel further sought to differentiate their case from the decision of the Commissioner (Appeals) in the case of Alpine Mineral (order-in-appeal dated 3-4-2013). He argued that in the said case approximately 1,16,000 MT was loaded by mid-night of 29-12-2011 and balance on 30-12-2011. The rate of duty was enhanced to 20% with effect from 30-12-2011. He argued that in the said case let export order under Section 51 granted on 30-12-2011. There was no permission to load granted on 29-12-2011. In view of the above, he argued that since there was only one let export order and the same was granted on 30-12-2011 the rate of duty applicable on 30-12-
2011 became applicable. He argued that in their case there are in fact four permissions to load on different dates, therefore the case is distinguishable.
6. We have considered the rival submissions. We find that Section 16(1) and Section 51 of the Customs Act, are relevant in this case. The said sections read as follows :
Section 16(1) in the Customs Act, 1962 :
The rate of duty and tariff valuation, if (1) any, applicable to any export goods, shall be the rate and valuation in force, -
(a) in the case of goods entered for export under section 50, on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under section 51;
(b) in the case of any other goods, on the date of payment of duty.
Section 51 in the Customs Act, 1962 :
Clearance of goods for 51. exportation. - Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation.
Section 51 prescribes that on being satisfied that the export goods are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the goods may permit clearance and loading of 6 Appeal No. C/41/2010 goods for exportation. It is seen that in the instant case at the time of export following endorsement has been made by the Customs officers.
"Inspected the lot of 20,000 MT of iron ore fines at bank stream in barges. Examined the same superficially checked the desp. and quantity as per invoice and other related documents, RSS will be drawn in triplicate as per ISI specifications by recognized sampler in presence of CHA/exporter under customs supervision and the same will be forwarded to Dy. CC for test".
Under the endorsement the preventive officer has also recorded "passed for shipment". It is seen that in all these cases the duty has been paid before start of loading. The fact that permission of loading is granted implies that the officer has held that the goods are not prohibited. In each of the cases entire duty has been paid on the first date of loading. Thus each permission of loading can be construed to be a permission under Section 51 of the Customs Act.
14. In the case of Narayan Bandekar & Sons Pvt. Ltd., the Hon'ble High Court of Bombay reported in 2010 (259) E.L.T. 362 has observed that actual time of loading of the ship is not relevant for the purpose of ascertaining the date for the purpose of Section 16(1)(a). In the said case the duty was enhanced from 1-3-2007 while the goods were received in the port and order allowing shipment of the same was given on 28-2- 2007 the loading of the goods happened on 1-3-2007. In these circumstances, the Hon'ble High Court held that the date on which let export order has been given, i.e., 28- 2-2007 is the relevant date for the purpose of Section 16(1)(a). The facts in the said case are significantly different insofar as no separate permission for loading was granted in ports and there was only one let export order. Since there was only one let export order (permission for clearance) for loading of the ship as against multiple permissions in the instant case, the decision of the Hon'ble High Court cannot be applied. In the case of Kineta Minerals & Metals Ltd. - 2009 (241) E.L.T. 416 (Tribunal). Under similar circumstances permission for clearance and loading of goods for exportation was granted prior to 1-3-2007. However, loading of the goods continued after 1-3-2007. In these circumstances the Tribunal observed as follows :
The Customs procedure is like this. In case of export of the 6. goods, the export manifest is filed prior to the departure of the vessel in terms of Section 41 of the Customs Act. The said manifest contains all the goods which are in the ship and to be exported. In terms of Section 31, loading of the export goods will be done only after the grant of entry outwards and no export goods shall be loaded unless the shipping bill is passed by the proper officer and unless the goods are handed over to the Master of the vessel. We have already seen that Section 51 provides that when the proper officer is satisfied that an entry made under Section 50 is correct and exporter has paid the duty, if any assessed, then he may make an order permitting clearance and loading for exportation. We also note that the order under Section 51 is a composite order permitting clearance and loading of the goods for export. Once that order is given, the relevant date in terms of Section 16 is the date of that order. Just because the loading is not completed or in process, there was change in the rate of duty, it does not mean that the earlier order permitting clearance and loading of the goods for export becomes null and void and the new rate would be applicable. That is not there in the Scheme of the Customs Act. What is relevant is that the date of assessment of the shipping bill. The assessment has been done prior to the imposition of Export duty, i.e. on 1-3- 2007 and the duty/cess determined in this case has already been collected prior to 1-3-2007. Nothing can prevent for the export of the consignment and the later changes in the rate of duty would not be relevant. In view of this, we do not find that the impugned order is legal and proper. In fine, we are of the view that of the entire quantity covered by the two shipping bills, no export duty would be leviable as the order permitting clearance and loading has been done even prior to 1-3-2007 which is prior to the imposition of Export duty. Hence in terms of Section 16 of the Customs Act, in the present case, the rate of duty and valuation would be only as on the date of order permitting clearance and loading under Section 51 of the Customs Act, 1962. Any change subsequent to the date of order under Section 51 would not be applicable to the consignments in question. Hence we allow the appeal with consequential relief.
In the said decision, the Tribunal distinguished the Boat note issued under Section 35 of the Customs Act from the permission given under Section 51 of the Customs Act. It was 7 Appeal No. C/41/2010 held that date of issue of boat note is irrelevant insofar as the determining the date relevant for the purpose of Section 15(1)(a). This decision is consistent with the decision of the Hon'ble High Court in the case of Narayan Bandekar & Sons (supra). The decision of Kineta Minerals & Metals Ltd. has been upheld by the Hon'ble High Court of Andhra Pradesh as reported in 2011 (269) E.L.T. 494 (A.P.). The Revenue has relied on the decision of the Hon'ble High Court in the case of Prime Mineral Export Pvt. Ltd. (supra). In the said case the goods were presented for examination in three lots between 19-12- 2009 to 23-12-2009 and the same were passed for shipment and endorsement of the shipping bill as "let export order" was made on 22-12-2009. The loading of the vessel was commenced on 20-12-2009 and was completed on 26-12-2009. The duty @ 5% was paid on these goods as per the existing rate on 23-12-2009. However, on 24-12-2009 the rate of duty was enhanced to 10%. The issue before the Hon'ble High Court in the said case was the grievance of the appellant regarding the non-release of duplicate/exchange control copy of the shipping bill along with the statutory declaration form so as to enable the petitioner to submit the same to the Reserve Bank of India authorities as per the provisions of Foreign Exchange Management (Export of Goods and Services) Regulation, 2000. After examining the facts of the case the Hon'ble High Court observed that after a "let export order" is issued the documents cannot be withheld and the said documents will have to be released. Even if the documents are released, the authorities are not precluded from taking steps for recovery of duty in accordance with law. It can be seen that the dispute before the Hon'ble High Court of Bombay was not regarding the relevant date for the purpose of assessment under Section 16(1)(a) but release of goods. Thus, no ratio has been laid down in the said decision of the Hon'ble High Court.
6.1 In view of above we dismiss the appeals."
5. In view of the above judgment, it is clear that the date of export should be the date of let export order. Accordingly, export duty is payable by the appellant. The impugned order is upheld and the appeal is dismissed.
(Order dictated and pronounced in the open court) Raju Ramesh Nair Member (Technical) Member (Judicial) KL