Commissioner of Customs (Preventive) Vs S.M. Niriyat Pvt. Ltd. (Orissa High Court)
The Orissa High Court dismissed a batch of customs appeals filed by the Commissioner of Customs (Preventive), Bhubaneswar, against M/s. S.M. Niriyat Pvt. Ltd. and others, holding that the issue concerning the determination of iron content (Fe) in Iron Ore Fines (IOF) for customs duty purposes had already been conclusively settled. The Court confirmed that the Fe content should be determined on the basis of Wet Metric Ton (WMT) and not Dry Metric Ton (DMT), and that no substantial question of law arose for consideration.
The appeals challenged the order dated 25 September 2024 of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, which had dismissed the Revenue’s appeals and allowed the cross-objections filed by the exporters and their directors. These cases arose from multiple Orders-in-Original issued by the Commissioner of Customs (Preventive), Bhubaneswar, in January 2024, which had imposed duties and penalties on various respondents, including S.M. Niriyat Pvt. Ltd., Disha Realcon Pvt. Ltd., and their directors Ajay Gupta and Manish Khemka.
The Revenue raised several questions of law before the High Court, primarily challenging the CESTAT’s decision to accept WMT as the basis for calculating Fe content in IOF for customs duty purposes. The Department questioned whether the Tribunal had erred in upholding such a method, claiming that the conversion formula used to determine Fe content on a WMT basis lacked statutory backing. It further argued that data retrieved from the mobile phone of Ajay Gupta, Director of S.M. Niriyat Pvt. Ltd., showed instances of cargo being split into lots below and above 58% Fe content to manipulate duty liability, though the combined average exceeded the threshold.
