Sri Sainath Industry Private Limited Vs Commissioner of Customs (CESTAT Hyderabad)
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, has ruled that for the export of iron ore under a provisional assessment regime, the transaction value as finalized in the invoices and evidenced by the Bank Realisation Certificate (BRC) must be accepted, even if a departmental test report suggests a variation in a parameter like moisture content. In the case of Sri Sainath Industry Private Limited Vs Commissioner of Customs, the Tribunal set aside the Commissioner (Appeals)’s order and remanded the matter for re-computation of the refund based solely on the declared and realized transaction value.
The appellant, an exporter of iron ore, challenged the finalization of a provisional assessment where the adjudicating authority had recalculated the duty liability. Iron ore exports were done under contracts where the final price was determined by several specifications, notably the Fe (iron) percentage and moisture content. Since these values were not immediately known, the initial assessment was provisional.
Post-export, the appellant submitted final documents, including the final invoice and BRC, to the department. While the adjudicating authority accepted the Fe content as declared (often based on CIQ analysis), it rejected the declared moisture content of 6%, substituting it with the department’s CRCL test report figure of 7.66%. This higher moisture content was used to reduce the quantity of dry metric tons (DMT) exported, thereby altering the final quantum of export and consequently affecting the duty payable and the resulting refund.
