Custom, Excise & Service Tax Tribunal
Mandovi Pellets vs Goa on 8 December, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NOS: C/1017 to 1019/2007 & C/1217 & 1218/2008 [Arising out of Orders-in-Appeal No: GOA/CUS/MP/35 to 37/2008 dated 04/06/2008 and GOA/CUS/MP/51 & 52/2008 dated 03/1/2008 passed by the Commissioner of Central Excise & Customs (Appeals), Goa.] For approval and signature: Hon'ble Shri P.G. Chacko, Member (Judicial) and Hon'ble Shri S.K. Gaule, Member (Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : Yes 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : Yes 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes Mandovi Pellets ...Appellant Vs Commissioner of Customs & Central Excise Goa ...Respondent Appearance: Shri H.K. Maingi, Advocate for the appellant Shri A.K. Prasad, Authorised Representative (JCDR) for the respondent CORAM: Hon'ble Shri P.G. Chacko, Member (Judicial) and Hon'ble Shri S.K. Gaule, Member (Technical) Date of hearing: 08/12/2010 Date of decision: 21/01/2011 ORDER NO: .................................................... Per: P.G. Chacko: These appeals are by Mandovi Pellets (A Division of Chowgule & Co. Pvt. Ltd.). The appellant had filed shipping bill No. 49 dated 14/06/2007, shipping bill No. 5017063 dated 06/08/2007 and shipping bill No. 5018017 dated 08/11/2007 for export of different quantities of iron ore pellets at 'nil' rate of export duty. The assessing authority assessed the goods to export duty @ Rs. 300/- per tonne as applicable to "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the Customs Tariff Act, 1975. Similar assessments were made on three further exports covered by shipping bills No. 5018722 dated 28/01/2008, No. 5019805 dated 15/05/2008 and No. 5019838 dated 22/05/2008. The appellant paid the amounts of duty under protest. Subsequently, they challenged the assessments before the Commissioner (Appeals). The appellate authority upheld the assessments and rejected the assessee's appeals after holding that the goods exported by them were chargeable to export duty under Heading No. 11 of the Second Schedule to the Customs Tariff Act. The present appeals are directed against the appellate Commissioner's orders. 2. After examining the records and hearing both sides, we note that the appellant has heavily relied on a judgment dated 21/03/1983 of the Hon'ble Bombay High Court (Panaji Bench) in FCA No. 46 of 1978 (The Board of Trustees of the Port of Marmugao vs. Chowgule & Co. Pvt. Ltd.). This necessitates a brief historical account. M/s. Chowgule & Co. Pvt. Ltd. had entered into a contract dated 30/03/1959 with the Portuguese Government under a law enacted by the said Government and, accordingly, the company was authorised to install and operate a mechanical ore handling plant at Marmugao harbour and also to export iron ore at concessional rate. The company, accordingly, installed an iron ore pelletisation plant at the harbour in December, 1966 and started exporting iron ore pellets from 1967. However, the Port Trust raised a dispute with reference to Clause 30 of the above contract. They maintained that the iron ore pellets were not the same as iron ore within the meaning of Clause 30 of the contract. The Port Trust by a letter dated 11/07/1969 informed M/s. Chowgule & Co. that, if no arbitrator was appointed by them under Clause 31 by 15/08/1969, the company would not be allowed to export iron ore pellets unless they paid Rs. 3.35 per tonne to the Port Trust. At this stage, the company filed a civil suit for declaration and injunction against the Port Trust. The jurisdictional Civil Judge decreed the suit declaring that the iron ore pellets produced by the plaintiff were not different from 'iron ore' mentioned in Clause 30 of the contract. The Port Trust, thereupon, filed the above appeal before the Panaji Bench of the Bombay High Court. The High Court allowed the appeal by holding that the expression 'iron ore' used in Clause 30 of the contract did not include iron ore pellets. A Special Leave Petition by M/s. Chowgule & Co. Pvt. Ltd. against the High Court's judgment was dismissed by the apex court. 3. 1 The learned counsel for the appellant heavily relied on the High Court's judgment and submitted that the iron ore pellets exported by them were different from "iron ores and concentrates, all sorts" falling under Heading No. 11 of the Second Schedule to the Customs Tariff Act and hence would not be chargeable to export duty. He submitted that the iron ore pellets exported by the appellants were manufactured out of limonite ore (hydrated iron oxide) through physico-chemical operations in the pelletisation plant. Both physical and chemical changes took place in the conversion of limonite ore to pellets as proved by technical experts before the civil court in the aforesaid case between the company and the Port Trust. The pellets were, therefore, to be recognised as a commodity distinct and different from the ore. The counsel also relied on the Supreme Court's judgment in Minerals and Metals Trading Corporation of India Ltd. vs. Union of India & Ors. (1972) 2 SCC 620 wherein it was held that the important test to determine whether a process involving ore amounted to manufacture was to see whether the chemical structure of the ore changed or remained the same. In the cited case, the apex court found that wolfram ore, which was imported by MMTC, was never subjected to any process of roasting or treatment with chemicals for removing impurities. It was held to be wolfram ore concentrate containing 65% WO3, which was of merchantable quality and was commercially known as such. The court further held that the wolfram ore concentrate did not cease to be wolfram ore. On the other hand, the iron ore pellets were obtained by a process involving physico-chemical changes and hence recognizable as a manufactured product different from the ore. The counsel also, contextually, submitted that the appellant was paying Central Excise duty on the pellets cleared for home consumption. The learned counsel submitted that, in the matter of determining whether the iron ore pellets were the same as, or different from, iron ore concentrate, the only method was to apply the trade parlance test particularly when neither the First Schedule to the Customs Tariff Act nor the HSN was aligned with the Second Schedule to the Act. He relied on Camlin Ltd. vs. CCE, Mumbai 2008 (230) ELT 193 (SC) in this connection. In that case, it was held that, when the entries in the HSN and the Central Excise Tariff were not aligned, reliance could not be placed upon the HSN for the purpose of classification of goods under the Tariff. Reliance was also placed by the counsel on two affidavits, one by Dr. Naresh Bedi, CEO, Quality Services and Solutions, and the other by Mr. Purushottam Motilal Pai, Chartered Engineer, both dated 23/07/2007. Both the deponents stated inter alia thus: " Iron Ore Pellets are manufactured by use of iron ore fines and/or iron ore concentrates, as a intermediate or value-added product, for its use in the iron / steel making process through DRI-Electric Arc Furnace/Blast Furnace route. As such, Iron Ore Pellets cannot be compared with primary Iron ore fines and concentrates or lumps." According to the learned counsel, the affidavits of the two independent experts were liable to be relied on in the absence of contra evidence from the part of the Revenue. 3.2 The learned counsel also questioned the correctness of the view taken by the lower appellate authority in regard to the expression "all sorts" used in the description of goods given under Heading No. 11 of the Second Schedule to the Customs Tariff Act. He submitted that the pellets in question were neither iron ore nor concentrate and, therefore, the expression "all sorts" did not have any relevance. It was submitted that the pellets were manufactured out of limonite ore and this limonite ore only could be a sort of iron ore coming within the coverage of the description "iron ores and concentrates, all sorts". The learned counsel also argued that any description of goods in the First Schedule to the Customs Tariff Act was not to be used for ascertaining the meaning of any description of goods in the Second Schedule to the Act. The First Schedule to the Act occupies the field of imports whereas the Second Schedule occupies the field of exports. The two schedules were enacted for different purposes and, therefore, one cannot be used to interpret the other. In this connection, the learned counsel relied on the apex court's judgment in Joint Commissioner of Income Tax, Surat vs. Saheli Leasing and Industries Limited 2010 (253) ELT 705 (SC). Finally, the learned counsel submitted that the iron ore pellets were not to be equated to "iron ores and concentrates" for the purpose of levy of export duty. 4. 1 The learned JCDR submitted that it was wrong to say that the provisions of the HSN could not be relied upon in the interpretation of the description of goods in the Second Schedule to the Customs Tariff Act. What is export for India is import for another country and, therefore, the same system of classification has to be followed by both exporting and importing countries. In this connection, the learned JCDR argued that the relevant Explanatory Notes in the HSN could be relied upon for ascertaining the scope of description of goods given in the Second Schedule to the Customs Tariff Act. Contextually, he pointed out that, in the case of Collector of Customs vs. Lakshmanan Isola Ltd. 1992 (61) ELT 315 (Tribunal), this Tribunal relied on notes to Heading 68.15 of BTN (precursor to HSN) in the context of determining whether mica paper exported by the said company was covered by the description "Mica, including fabricated mica" under Heading No.8 of the Second Schedule to the Export Tariff for the purpose of levy of export duty. The learned JCDR also relied on the Hon'ble Supreme Court's judgment in Milak Brothers vs. Union of India 1991 (51) ELT 204 (SC) wherein the apex court, in the context of determining whether the goods exported by the party was dutiable under Heading No. 20 of the Second Schedule to the Export Tariff, compared the said heading with corresponding entries of the Import Tariff, the BTN and the ITC and held that the legislature had deliberately used a wider expression in the Second Schedule to the Export Tariff and that the intention of the legislature must be given effect to. The learned JCDR submitted that various sorts of iron ores and concentrates stood classified under Heading 2601 of the First Schedule to the Customs Tariff Act and Heading 2601 of the Schedule to the Central Excise Tariff Act and that both these were aligned with Heading 26.01 of the HSN. He submitted that all sorts of iron ores and concentrates of the First Schedule to the Customs Tariff Act were covered by Heading No. 11 (Iron ores and concentrates, all sorts) of the Second Schedule to the Act. In other words, the description "iron ores and concentrates, all sorts" in the Second Schedule to the Act was wide enough to encompass all sorts of iron ores and concentrates classified under different sub-headings of Heading 2601 of the First Schedule. The JCDR also produced an excerpt from "Iron ore and its beneficiation", a Knol by Partha Das Sharma. He also produced a piece of literature on "Iron Ore Processing for the Blast Furnace" from the website of the National Steel Pellet Company, an iron ore mining and processing facility in Minnesota. Relying on the literature, the JCDR submitted that iron ore pellets were obtained by agglomeration of iron ore fines into larger lumpy pieces with or without addition of additives. Two types of agglomerated products are commonly produced / used in the industry, namely, sinter and pellet and the processes are known as sintering and pelletising respectively. Pellets are normally produced in the form of globules from very fine iron ore and mostly used for production of sponge iron in gas-based plants, though they are also used in blast furnaces in some countries. In this manner, the JCDR argued that iron ore pellets were nothing but an agglomerated form of iron ore and hence would be appropriately classified as 'iron ores and concentrates, all sorts' under Heading No. 11 of the Second Schedule to the Customs Tariff Act. In this context, the learned JCDR once again referred to Heading 2601 of the Schedule to the Central Excise Tariff Act, corresponding to Heading 2601 of the First Schedule to the Customs Tariff Act. It was pointed out that "Iron Ores and Concentrates" of Heading 2601 were divided into "non-agglomerated" (SH 2601 11) and "agglomerated" (SH 2601 12) and that "iron ore pellets" (SH 2601 12 10) were specifically placed under "agglomerated" (SH 2601 12). Iron ore lumps, iron ore fines and iron ore concentrates fell in the non-agglomerated category while iron ore pellets fell in the agglomerated category. The main Heading 2601 (Iron ores and concentrates) covered both non-agglomerated and agglomerated categories including iron ore pellets. Therefore, according to the learned JCDR, the iron ore pellets exported by the appellant came within the coverage of "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the Customs Tariff Act. Contextually, it was also pointed out that the very same commodity (iron ore pellets) was classified by the appellant under SH 2601 12 10 of the Schedule to the Central Excise Tariff Act when cleared to the domestic market. 4.2 Referring to the affidavits relied on by the appellant, the learned JCDR submitted that both the affidavits were liable to be rejected as solicited documents. He pointed out that the averments made in the affidavits were identically worded, which indicated that the appellant procured them to suit their purpose. Claiming support from the Tribunal's decision in Commissioner of Central Excise, Vadodara vs. Kedia Agglomerated Marbles Ltd. 1995 (77) ELT 710 and Stainless India Ltd. vs. Commissioner of Central Excise, Jaipur 2002 (141) ELT 705, the JCDR submitted that neither of the affidavits was a reliable evidence. 4.3 Referring to the Hon'ble High Court's judgment dated 21/03/1983 in the case of Port of Marmugao vs. Chowgule & Co. Pvt. Ltd., the learned JCDR submitted that the decision was based on how the parties to the contract had understood the expression "iron ore" contained in clause 30 thereof. According to the learned JCDR, the interpretation given by the contracting parties way back in 1959 could not necessarily be followed in the present case inasmuch as the understanding of commercial terms and expressions was not static. He submitted that commercial understanding was bound to change with the development of materials, methods, techniques and processes. He pointed out that, in the case of Commissioner of Sales Tax vs. Agarwal & Co. 1983 (12) ELT 116 (Bom.), the Hon'ble High Court acknowledged this reality and, after taking into account the continuously evolving technology of milk products, held that milk in powder form was not to be excluded from the generic term of 'milk'. Therefore he argued that nothing contained in the Hon'ble High Court's judgment dated 31/03/1983 could be relied upon in interpreting Heading No. 11 of the Second Schedule to the Customs Tariff Act. With reference to the expression "all sorts" figuring in the description of goods under Heading No. 11 ibid, the learned JCDR relied on the Gujarat High Court's decision in Jalal Plastic Industries vs. Union of India 1981 (8) ELT 653 (Guj.) wherein it was held that the expression "all sorts" used in sub-item (2) of Tariff Item 15A of the Central Excise Tariff was very comprehensive and the same brought within its sweep each and every article made of plastic. Sub-item (2) of Tariff Item 15A read thus: "Articles made of plastics, all sorts, including tubes, rods, sheets, ....." In the same context, the learned JCDR also relied on Kirloskar Electric Co. Ltd. vs. Collector of Central Excise, Bangalore 1986 (26) ELT 381 (Tribunal), wherein the same expression "all sorts" used in the description of goods under Item 30 (Electric Motors, all sorts) of the Central Excise Tariff was interpreted to mean a group entry covering all types of electric motors. The learned JCDR thus defended the view taken by the Commissioner (Appeals) in this case. He urged that "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the Customs Tariff Act be held to include iron ore pellets. 5. We have perused the records and considered the submissions. The question to be settled is whether the iron ore pellets exported by the appellant are classifiable as "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the Customs Tariff Act. Keeping in view the elaborate classification of "iron ores and concentrates" in (a) the First Schedule to the Customs Tariff Act, (b) the ITC (HS) Classification of Export and Import Items and (c) the Schedule to the Central Excise Tariff Act, the learned Commissioner (Appeals) examined the scope of the expression "all sorts" and held that "iron ore pellets" could be considered as one sort of "iron ores and concentrates" and hence chargeable to export duty under Heading No.11 of the Second Schedule to the Customs Tariff Act. We are in full agreement with her decision for the following reasons: (i) The learned counsel's contention that, as the classification of export goods in the Second Schedule to the Customs Tariff Act (CTA) is not aligned with the HSN, nothing contained in the HSN or in the First Schedule to the CTA can be relied on for classifying export goods is untenable, and so is his contention that the First Schedule to the CTA can be of no aid to classification of goods in the Second Schedule to the Act as the two Schedules operate in different fields of taxation viz: imports and exports. Both the contentions are hit by the view the Supreme Court held in Milak Brothers case. In this case, the question considered by the apex court was whether the goods (blanched/roasted / salted peanuts packed in vacuum containers) exported by the assessee was "groundnut kernel" chargeable to export duty under Item No. 13/20 of the Second Schedule to the Indian Tariff Act, 1934 / the Customs Tariff Act, 1975. The product was obtained by subjecting raw groundnuts (without shell) to a process consisting sequentially of sorting & cleaning, dry-roasting, cooling, blanching, sorting, frying, anti-oxidant treatment, cooling, glazing & salt-treatment, packing. The assessee called it "processed peanuts" and contested its classification as "groundnut kernel". They referred to entries in the British Trade Nomenclature (BTN), the Indian Import Tariff and the Indian Trade Classification (ITC) and sought to establish that there were two types of groundnut kernel viz. an edible type and another type used for extraction of oil; that these were two different trade commodities having different characteristics; that the exported goods was the edible type appropriately to be described as "processed peanuts" and that the entry in the Export Tariff should be confined to the oil-yielding type of groundnut kernel. The department argued that "groundnut kernel" under the Export Tariff had the widest connotation and should include the roasted, blanched, fried groundnut kernel also. The Supreme Court accepted this argument and held as under: "But the fact is that, though the raw groundnut kernel has undergone a drying, roasting and frying process, its identity as groundnut is not lost. Even in the market to which it is exported and where it is marketed, it is purchased only as groundnuts (or peanuts, as they are called in the U.S.A.). May be there are two different commodities but both are known only as `groundnuts'. The argument that the scope of the entry should be restricted because of the two-fold classification existing elsewhere between groundnuts as "oil-seeds" and groundnuts as "fruits, nuts and edible substances" does not appeal to us. In the first place, it does not meet the argument that basically both items are only varieties of groundnuts and hence not taken out of the relevant entry. Secondly, there is force in the argument of State counsel that the legislature has deliberately not adopted, for the purposes of the Second Schedule, the minute multi-classification of the First Schedule and allied classifications. Unlike the Import Tariff, the BTN and the ITC, there is no sub-classification attempted in the export entry. The legislature must be presumed to know that, for import purposes, for instance, groundnuts are classified under different headings with differential rates of duty. Those entries appear not elsewhere but in the First Schedule of the very enactment which sets out the export tariff. The First Schedule to the Indian Tariff Act refers to seeds, oil-seeds and oil in Section II and talk only of canned fruits and vegetables in Section IV (dealing with products of food-preparing industries). The entries in the Customs Tariff relating to imports have already been touched upon. If, in spite of such detailed classification elsewhere, the legislature decided to use a wider expression in the Second Schedule, the intention of the legislature must be given effect to. (underlining supplied) The apex court, after noting that the import tariff and the export tariff were embodied in the First and Second Schedules to the same Act viz: the Customs Tariff Act and that the legislature had deliberately not chosen to subdivide the entry in the Second Schedule as in the First Schedule, took the view that the legislative intent was to use a wider expression in the Second Schedule and the same must be given effect to. The court rejected the assessee's plea to give a restrictive meaning to the entry in the Second Schedule. What emerges from its decision is an important ruling - that an entry without subdivisions in the Second Schedule to the CTA would normally encompass all subdivisions of similar entry in the First Schedule. Applying this ruling to the instant case, we hold that Heading No. 11 (iron ores and concentrates, all sorts) of the Second Schedule to the CTA has a coverage wide enough to include iron ore pellets, one of the numerous subdivisions of Heading No. 2601 (iron ores and concentrates, including roasted iron pyrites) in the First Schedule to the CTA. (ii) The expression "all sorts" used in Heading No. 11 of the Second Schedule to the CTA indicates the widest coverage of "iron ores and concentrates" under that heading. Therefore, all goods falling under all sub-headings of Heading 2601 (iron ores and concentrates) of the First Schedule to the CTA must be within the ambit of Heading No.11 ibid. The interpretation given to the expression "all sorts" by the High Court in Jalal Plastic Industries case and by the Tribunal in Kirloskar Electric Co. case is of substantial support to this view. (iii) The following is an excerpt from the First Schedule to the CTA: "Tariff Item Description of goods (1) (2) 2601 -
Iron ores and concentrates, including roasted iron pyrites
-
Iron Ores and concentrates, other than roasted iron pyrites:
2601 11
--
Non-agglomerated:
2601 11 10
---
Iron ore lumps (60% Fe or more) 2601 11 20
---
Iron ore lumps (below 60% Fe, including black iron ore containing up to 10% Mn) 2601 11 30
---
Iron ore fines (62% Fe or more) 2601 11 40
---
Iron ore fines (below 62% Fe or more) 2601 11 50
---
Iron ore concentrates 2601 11 90
---
Other 2601 12
--
Agglomerated:
2601 12 10
---
Iron ore pellets 2601 12 90
---
Other 2601 12 00
-
Roasted iron pyrites"
The above classification clearly shows that iron ore pellets are iron ore in agglomerated form. The literature produced by the learned JCDR says that these pellets are obtained by agglomeration (pelletisation) of iron ore fines into globules with or without addition of additives. Iron ore lumps, iron ore fines and iron ore concentrates are in the non-agglomerated category. Roasted iron pyrites has been placed in a separate class of iron ores and concentrates. All the goods mentioned in column (2) of the above table can appropriately be grouped as "iron ores and concentrates, all sorts" as shown below: Iron ores and concentrates, including roasted iron pyrites Iron ores and concentrates, other than roasted iron pyrites Non-agglomerated Agglomerated ? Iron ore lumps ? Iron ore pellets ? Iron ore fines ? Other ? Iron ore concentrates Roasted iron pyrites ? Other Iron ores and concentrates, all sorts
(iv) Unlike iron ore pellets (SH 2601 12), iron ore fines (SH 2601 11) are in the non-agglomerated category of iron ores and concentrates falling under Heading 2601 of the First Schedule to the CTA. That these iron ore fines are also considered to be within the ambit of Heading No. 11 of the Second Schedule to the CTA is obvious from Notification No. 62/2007-Cus dated 03/05/2007 which grants partial exemption from payment of export duty on "iron ore fines of Fe content 62% and below falling under Heading No. 11 of the second Schedule to the CTA". The literature available on record says that the crushing of large lumps of iron ore mined from the earth generates a lot of fines also. It says that the naturally occurring, extremely friable, high grade Haematite (an iron ore in the form of ferric oxide: Fe2O3) powder is called "blue dust". It further says that iron ore fines or "blue dust" cannot be directly charged in the blast furnace and should be agglomerated (by igniting at lower temperatures causing only interfacial fusion) into lumpy pieces (with or without addition of additives like limestone, dolomite, etc.) before charging in the furnace. 'Pellet' is just one of the two types of agglomerated products, the other one being 'sinter'. Normally, very fine iron ore is pelletised and relatively coarser fine iron ore is sintered. Pellets are in the form of globules whereas sinter is a clinker-like aggregate. The literature nowhere says that pelletisation of iron ore will change its chemical composition. It only brings about a physical change to facilitate the charging of the ore into the blast furnace as part of metallurgical operations for extraction of elemental iron (Fe). According to technical literature, the common iron ores are (1) Haematite (Fe2O3) containing 70% Fe; (2) Magnetite (Fe3O4) containing 72% Fe; (3) Limonite (Fe2O3 + H2O) containing 50 - 60 % Fe and (4) Siderite (FeCO3) containing 48% Fe. The pellets exported by the appellant are said to have been made from limonite which is, chemically, ferric oxide in hydrated form. The appellant has not proved that pelletisation of limonite fines brings about change of ferric oxide to some other chemical substance. On the other hand, in the appellant's own case [Mandovi Pellets vs. Union of India & Others] 1989 (2) LLJ 364-BOM, it was observed by the Bombay High Court that iron ore pelletisation was merely dressing of the fine powdery iron ore so that the ore could be handled more effectively. In the result, iron ore remains iron ore even after pelletisation of its fines. If iron ore fines belong to the class of "iron ores and concentrates, all sorts" under Heading No. 11 of the Second Schedule to the CTA vide Notification No. 62/2007-Cus, so do iron ore pellets.
6. The learned counsel argued that, as duty of excise was levied on the pellets cleared by the appellant for home consumption, the department treated pelletisation of iron ore as a process of manufacture and therefore the pellets were to be recognized as a commodity different from iron ore for the present purpose also. This argument is specious but not acceptable as the basis of levy of export duty under the Customs Act is different from that of levy of excise duty under the Central Excise Act. The above argument ignores the fact that the taxable event is 'export' in one case and 'manufacture' in the other. A consideration which is relevant to levy of a tax under one statute may not be relevant to levy of a different kind of tax under another statute unless its relevance to the latter is statutorily recognised.
7. We shall now consider the High Court's judgment in The Board of Trustees of the Port of Marmugao vs. Chowgule & Co. Pvt. Ltd. which was heavily relied on by the counsel for the appellant. What was settled by the court in that case was a contractual dispute between the Port Trust and the Company. The question was whether 'iron ore' mentioned in clause 30 of the contract made on 30/03/1959 between the Company and the Portuguese Government under a Portuguese law enacted in 1958 would include iron ore pellets. After considering various factors including (a) the circumstances surrounding the contract, (b) the conditions prevailing in Goa in respect of iron ore when the contract was made, (c) what the parties had in mind with regard to iron ore at that time, the High Court accepted the Port Trust's contention that "iron ore" did not include the pellets. We have many a reason to hold that the High Court's decision is not applicable to the present case. Firstly, that decision is binding only on the contracting parties. It is not binding on the Indian Customs authorities. Secondly, the said decision was taken by considering various circumstances which prevailed in 1958-59 and by ascertaining the intention of the contracting parties. It is nobody's case that the same circumstances prevailed in 2007-08 after almost half a century or that the intention of Chowgule & Co. survived the tenure of the contract. Thirdly, the meaning of "iron ore" in commercial parlance appears to have changed over the decades and, in 1975, Parliament, while enacting the Customs Tariff Act, brought lumps, fines and pellets of iron ores within the meaning of "iron ores" vide Heading No. 2601 of the First Schedule read with Heading No. 11 of the Second Schedule to the Act. In this connection, it may be noted that, in the context of interpreting the term "milk in powder form" for purposes of the Bombay Sales Tax Act, 1959, the High Court in the case of Commissioner of Sales Tax vs. Agarwal & Co. 1983 (12) ELT 116 (Bom.) considered the effect of technological developments on interpretation of terms used in fiscal legislation. Here's an excerpt from para (7) of its judgment:
"In the case of Porritts & Spencer (Asia) Ltd. v. State of Haryana reported in 42 S.T.C. 433 the Supreme Court was required to consider the interpretation of the term 'textiles'. The Supreme Court observed that in interpreting any word in an entry, one should bear in mind that it does not embody a static concept. It is the skin of a living thought, and may change its hue with new developments in technology and emergence of new items and processes. A term in a fiscal legislation should be interpreted having regard to newly developing materials, methods, techniques and processes. It held that the concept of "textiles" was not a static concept. It had, having regard to newly developing materials, methods, techniques and processes a continually expanding content and new kinds of fabric may be invented which may legitimately, without doing any violence to the language, be regarded as "textiles". In the same manner, milk in powder form can be looked upon as a result of this continually evolving technology. There is no reason why it should be excluded from the generic term 'milk'".
(underlining added) The meaning of "iron ore" in trade parlance today cannot be the same as what it was half a century ago, and there is no reason why it should exclude iron ore pellets. Fourthly, in the case of Port Trust vs. Chowgule & Co, the High Court was dealing with a question of fact under the provisions of a contract and did not have to deal with Export Tariff. In the present case, we are dealing with a predominantly legal issue involving interpretation of the relevant provisions of the First and Second Schedules to the Customs Tariff Act, 1975. Therefore, the appellant cannot claim any support from the Hon'ble High Court's judgment in Port Trust vs. Chowgule & Co.
8. The counsel for the appellant relied on two affidavits dated 23/07/2007, one by Dr. Naresh Bedi and the other by Mr. Purushottam Motilal Pai. Both the deponents stated in textually identical paragraphs that iron ore pellets could not be compared with primary iron ore fines, lumps or concentrates. We are, indeed, dismayed at the spectre of substantive paragraphs of the two affidavits being identically worded, and have found substance in the objections raised by the JCDR. It is obvious that the affidavits were solicited to suit the appellant's purpose. Such documents cannot be relied upon as held by this Tribunal in Kedia Agglomerated Marbles case (supra) cited by the JCDR.
9. For the reasons stated by us, the decision of the learned Commissioner (Appeals) is only to be upheld. Accordingly, the appeals get dismissed.
(Pronounced in Court on 21/01/2011) (S.K. Gaule) Member (Technical) (P.G. Chacko) Member (Judicial) */as 26 26