UNION OF INDIA Vs. GANGADHAR NARSINGDAS AGRAWAL

JUDGEMENT

(1.) This is an appeal from a judgment of Pendse, J.D/- 4th October 1979 whereby he made the rule absolute in terms of prayer (b) in the aforesaid Writ Petition being Misc. Petition No. 1120 of 1974. Pendse, J. directed the respondents (appellants herein) to withdraw or cancel the impugned order passed by the 1st respondent and the 2nd respondent respectively and directed them to refund to the petitioners a sum Rs. 3,17,599.84 being the excess export duty recovered from the petitioners who are the respondents herein.

(2.) Very limited controversy has been raised by the appellants in this appeal, and that too in a half-hearted manner. The relevant facts can be shortly stated : The petitioners are the members of a Hindu undivided family and carried on business as exporters of lumpy iron ore and iron ore fines in the name and style of Messrs. Gangadhar Narsingdas Agarwal. By a Notification dated 2nd August 1966 Items 28 and 29 were introduced in the Second Schedule to the Tariff Act, 1934, whereby customs duty at the rate of Rs. 10/- per metric tonne was levied on the exports of lumpy iron ore and customs duty at Rs. 5/- per metric tonne levied on the exports of iron ore fines. By a Notification dated 24th July 1967 issued by the Government of India under Section 25(1) of the Customs Act, 1962, exemption was granted in respect of iron ore fines falling under Item 29 of the Second Schedule to the Tariff Act, 1934. Shortly stated, the effect of the said Notification, in respect of iron ore fines exported from India, was that, if the iron ore content in such iron ore fines was less than 62 per cent, the duty in excess of Rs. 3/- per metric tonne was exempted and where the iron ore content in such iron ore fines was 62 per cent or more duty in excess of Rs. 4/- per metric tonne was exempted. By another Notification dated 21st August 1968 issued under the same section of the Customs Act, the Government of India exempted lumpy iron ore falling under Item 28 of the Second Schedule to the Indian Tariff Act, when exported out of India, from so much of the duty of customs leviable thereon as was in excess of Rs. 6/- per metric tonne in the case of lumpy iron ore having 60 per cent or more but less than 63 per cent of iron ore content. In respect of lumpy iron ore having 58 per cent or more but less than 60 per cent of iron ore content such duty as was in excess of Rs. 5/- per metric tonne was exempted and in the case of lumpy iron ore having less than 58 per cent of iron ore content the exemption was in respect of such duty as was in excess of Rs. 4/- per metric tonne. The petitioners exported an aggregate quantity of 11,399.520 tonnes of lumpy iron ore and 29,480.80 tonnes of iron ore fines between August 1970 and December 1972 under ten shipments. The Customs Authorities were duly intimated by the petitioners before the actual export of the said goods was made. It is common ground that the iron ore fines as well as lumpy iron ore exported by the petitioners was in a moist condition at the time when it was exported, namely, put on board the vessels concerned for being exported. The petitioners paid the export duty on the iron ore fines exported by them on the footing of the iron ore content thereof being over 62 per cent which was the percentage of iron ore content as determined by Italab (Goa) Pvt. Ltd. on analysis of samples drawn at the time of the different shipments concerned. As far as lumpy iron ore exported by the petitioners was concerned, the petitioners paid export duty thereon on the footing of the iron ore content thereof being over 60 per cent as set out in the certificates issued by Italab (Goa) Pvt. Ltd. from analysis of samples drawn from various shipments concerned. These certificates certify that the aforesaid iron ore contents were determined on the basis of the analysis of the sample goods dried at a temperature of 105 Degree C. Thereafter the petitioners asked Italab (Goa) Pvt. Ltd. for certificates as regards iron contents of the said samples on the basis of the said lumpy iron ore and iron ore fines being in moist condition which was the actual condition in which these goods were exported. Certificates were duly issued by Italab (Goa) Pvt. Ltd. which stated that the iron content in the said lumpy iron ores and iron ore fines exported in a moist condition was about 57 per cent. Each of the certificates states precisely what were the iron ore contents in the iron ore fines and lumpy iron ores exported but generally speaking, these certificates indicated that the iron ore content was about 57 per cent. In these circumstances, the petitioners made refund applications claiming that they had erroneously paid duty at a higher rate on the footing of the iron ore content of these goods being higher than was actually present in the goods exported by them in the natural condition or the moist condition in which they were exported. The claim for refund made by the petitioners came to an aggregate amount of Rs. 3,17,599.84. These refund applications were dismissed by the Assistant Collector of Customs who took the view that to accept the claim made by the petitioners would lead to the absurd conclusion that the contents of iron ore depend upon the moisture. The appeals preferred by the petitioners met with no better fate and ultimately the petitioners filed the aforesaid writ petition.

(3.) Before going into the contentions of Mr. Rage, learned Counsel for the appellants, it must be noticed that there is no dispute that the lumpy iron ore and iron ore fines exported by the petitioners was in a moist condition at the time when it was exported. Thus, what the petitioners exported was moist lumpy iron ore and moist iron ore fines. It is also undisputed that the rate of customs duty has to be calculated on the basis of the goods being in such condition as they were in at the time of export. Thus, it is an undisputed position that the claim for partial exemption from customs duty made by the petitioners in the present case has to be determined on the footing of the goods exported being moist iron ore fines and moist lumpy iron ores.