In a significant judgment, the Orissa High Court mandates customs authorities to reassess export duties using Wet Metric Tonne methodology for transactions predating legislative amendments.
In a landmark decision, the Orissa High Court has directed the Commissioner of Customs (Preventive), Bhubaneswar, to re-adjudicate the assessment of export duties on iron ore fines using the Wet Metric Tonne (WMT) method, as specified in Circular No. 04/2012-Customs. The judgment came in response to a writ petition filed by OCL Iron and Steels Limited challenging an earlier order by customs authorities that calculated duties based on Dry Metric Tonne (DMT) methodology.
The case revolved around whether the Fe content of exported iron ore fines should be assessed using WMT or DMT. The petitioner argued that the assessment should adhere to the WMT method as outlined in the 2012 circular, which was applicable to transactions predating the amendment to the Customs Tariff Act by the Finance Act, 2022.
The court found that the previous assessment was flawed, as it applied the DMT method retroactively to transactions before the legislative change. This approach conflicted with the established legal position and the circular issued by the Central Board of Excise and Customs (CBEC). The bench, consisting of Mr. Harish Tandon, CJ, and Murahari Sri Raman, J, emphasized the binding nature of such circulars on customs authorities and the importance of maintaining uniformity in duty assessments across different ports.
The judgment also addressed allegations of fraud and misrepresentation by the petitioner, noting that any determination of fraudulent activity requires proper evidence and procedural safeguards. The court ordered the customs authorities to adhere to principles of natural justice, allowing the petitioner to respond to evidence before finalizing the assessment.
The decision mandates a complete reassessment of the export duties within four months, ensuring the petitioner is granted reasonable opportunity to be heard. The court's directive underscores the significance of adhering to statutory provisions and established judicial precedents in customs assessments.
Bottom line:-
Customs - Determination of Fe content for exported iron ore fines must be based on Wet Metric Tonne (WMT) method for transactions predating the amendment to the Customs Tariff Act, 1975, introduced by the Finance Act, 2022. Circular No. 04/2012-Customs, dated 17.02.2012, is binding on authorities and mandates WMT-based assessment of iron ore fines.
Statutory provision(s): Customs Act, 1962 Sections 12, 14, 16, 50, 51; Customs Tariff Act, 1975; Finance Act, 2022; Circular No. 04/2012-Customs, dated 17.02.2012
OCL Iron and Steels Limited v. Union of India, (Orissa) : Law Finder Doc id # 2889756
