Let export order cannot be issued before payment of full custom duty: CESTAT

Odisha Mining Corporation Limited Vs Commissioner of Central Excise (CESTAT Kolkata)

Introduction: The case of Odisha Mining Corporation Limited vs. Commissioner of Central Excise (CESTAT Kolkata) revolves around the rejection of a refund claim related to iron ore fines. The pivotal issue at hand is the issuance of a let export order and the associated duty payment timeline.

Background and Facts:

• The appellant entered into a contract with M/s S.K.Resources Ltd. for the sale of 63,200 MT of Iron Ore Fines.
• Shipping Bill No.00587/IOF/2007-08 was filed for Customs clearance on 06.12.2008.
• On 07.12.2008, Notification No.129/2008-Cus came into force, exempting Iron Ore Fines from export duty.
• The shipment occurred on 18.12.2008.
• The appellant filed a refund claim on 30.12.2008, which was initially rejected, citing the provisional assessment of the Shipping Bill.

Refund Claim Rejection:

• The first refund claim was returned due to the Shipping Bill not being assessed finally.
• A subsequent refund claim was also returned, deeming it premature.
• The Shipping Bill was ultimately assessed on 14.03.2009, as per a letter received on 08.01.2013.
• The refund claim was rejected, asserting that the duty was payable on 06.12.2008, and thus, the claim was not maintainable.

Appellant’s Arguments:

• The appellant contends that the Shipping Bill clearly shows that duty was paid on 08.12.2008, not on 06.12.2008.
• Asserts that the let export order date of 06.12.2008 is fabricated, as per their submissions.
• Emphasizes that the let export order cannot be issued before the payment of full duty.
• Claims entitlement to the refund as no duty was payable on the actual export date, i.e., 08.12.2008.

CESTAT Kolkata Ruling:

• CESTAT Kolkata examines the Shipping Bill and notes that the differential cess was debited on 08.12.2008.
• Observes discrepancies in the let export order, suggesting fabrication.
• Affirms that a let export order cannot precede the payment of full duty.
• Establishes the date of the let export order as 08.12.2008.
• Concludes that, considering the duty exemption on 07.12.2008, no duty was payable on 08.12.2008.
• Decides in favor of the appellant, allowing the appeal and potential consequential relief.

Conclusion: The ruling by CESTAT Kolkata in the case of Odisha Mining Corporation Limited vs. Commissioner of Central Excise sheds light on the intricacies of duty payment timelines and their impact on refund claims. The analysis of the Shipping Bill, let export order discrepancies, and the applicable notifications culminates in a decision favoring the appellant. This case underscores the importance of meticulous documentation in customs proceedings and the adherence to duty payment regulations. As businesses navigate the complexities of export duties, understanding such legal nuances becomes imperative to protect their financial interests. 

FULL TEXT OF THE CESTAT KOLKATA ORDER

The appellant is in appeal against the impugned order wherein the refund claim has been rejected.

2. The facts of the case are that the appellant entered into contract with overseas buyer M/s S.K.Resources Ltd. for sale of 63,200 MT of Iron Ore Fines. They filed Shipping Bill No.00587/IOF/2007-08 dated 06.12.2008 for Customs clearance of export goods. The Shipping Bill was assessed provisionally on 06.12.2008. On 07.12.2008, Notification No.129/2008-Cus dated 07.12.2008 came into force which exempted Iron Ore Fines from export duty. The shipment of cargo was made on 18.12.2008. Since the shipment was done after 07.12.2008, the appellant presuming that no duty is payable on export of Iron Ore filed the refund claim on 30.12.2008 for an amount of Rs.97,15,062/-. The said amount was paid by the appellant during filing of the Shipping Bill. The said refund claim was returned back to the appellant on the ground that the Shipping Bill was not assessed finally. Thereafter they filed refund claim again on 10.02.2009, which was again returned back to them. The said refund claim was returned on the premise that vide letter dated vide letter dated 15.09.2009 stating that the refund claim is pre-mature and Shipping Bill was not assessed till yet. The appellant received a letter dated 08.01.2013 stating that the Shipping Bill has already been finally assessed on 14.03.2009. Thereafter, the refund claim was submitted for consideration. The refund claim was rejected holding that as the Shipping Bill was assessed on 06.12.2008 and the let export order (LEO) was given on 06.12.2008 and on the said date, the appellant was liable to pay duty on export of Iron Ore Fines, in that circumstances, refund claim is not maintainable. Against the said order, the appellant is before the Tribunal.

3. The Ld. Counsel for the appellant drew the attention to the Shipping Bill showing that the appellant has not paid export duty on 06.12.2008 and the same was finally paid on 08.12.2008, in that circumstances, before payment of duty let export order cannot be issued. It is his submission that let export order although mentions date 06.12.2008, but same is fabricated, and further before 08.12.2008 as no let export order can be issued, and on the said date no duty was payable on export of Iron Ore Fines, therefore, they are entitled for refund claim.

4. On the other hand, the Ld.AR for the department supported the adjudication order.

5. Heard the parties, considered the submissions.

6. For better appreciation of the facts of the case to decide the issue whether export took place on 06.12.2008 or 08.12.2008, the Shipping Bill is extracted below:-

7. On going through the Shipping Bill, we find that it is clearly mentioned that differential cess of Rs.29,499/- was debited from the PLA vide Entry Sl.No.13 dated 08.12.2008, the said fact has been verified by the Inspector putting his initial dated 08.12.2008. Further, we have gone through the order of let export order, which is having some fabrication on face of it where some cutting is there thereafter signature was put and date of 06/12/2008 was mentioned. It is undisputed fact that let export order cannot be issued before payment of full duty by the assessee, in that circumstances, it cannot be said that let export order was issued to the appellant on 06.12.2008. Therefore, the date of let export order is to be taken as 08.12.2008.

8. In that circumstances, as iron ore fines were exempted from payment of duty vide Notification No.129/08 dated 07.12.2008, no duty was payable on 08.12.2008, therefore, the appellant was not liable to pay duty. Accordingly, the appellant is entitled for the refund claim of the duty paid.

9. In that view of the fact, we set aside the impugned order and allow the appeal with consequential relief, if any.

(Operative part of the order was pronounced in the open Court.)