Industrial Mineral Company Vs Commissioner of Customs (Madras High Court)
Chennai: In a significant ruling, the Madras High Court has directed the Commissioner of Customs to refund export duty paid under protest by Industrial Mineral Company (IMC) on processed and upgraded ilmenite. The court held that the company was entitled to the refund based on a binding decision by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in an identical case, despite the department’s appeal pending before the Supreme Court.
The dispute centered on the classification and applicable export duty rate for IMC’s product, processed and upgraded ilmenite. IMC, a registered 100% Export Oriented Unit, manufactures and exports this product, classifying it under Customs Tariff Heading (CTH) 26140020, which attracted an export duty of 5% from March 1, 2013, and subsequently 2.5% from March 1, 2015, as per Central Government notifications.
Prior to March 1, 2013, there was no export duty on ilmenite. However, with the introduction of duty, the Customs Department insisted that IMC’s processed and upgraded ilmenite should be classified under a heading attracting a higher export duty of 10%.
Facing this insistence, IMC paid the higher 10% duty under protest for several shipping bills from March 2014 onwards. The company formally requested permission to file shipping bills with the lower duty rate, but this was not acceded to, leading to the payment of the higher rate under protest.
