Two Or More Bills Of Entry Or Shipping Bills Cannot Be Taken Together And Assessed: CESTAT

The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “Two or more Bills of Entry or Shipping Bills cannot be taken together and assessed. The only exception made in the law are the Project Imports under Project Import Regulations, 1986.”

The Bench further stated that, “If the importer claims and is allowed imports under these regulations, all goods imported under various Bills of Entry under the project are assessed together under a single tariff heading 98.01. All assessments are kept provisional and at the end all assessments are finalised together.”

In this case, the assessee' had exported iron ore fines under various Shipping Bills. After it was processed, consignments covered by two or more Shipping Bills were loaded in the same hatch of the Vessel without any distinction as to the quality of cargo. In those Bills, where Fe content was below 58%, the assessee claimed exemption and did not pay duty. But paid export duty in other Bills.

A show cause notice was issued by DRI who proposed re-determination of the export duty on iron ore fines exported. The assessee' were asked to show cause in respect of the respective Shipping Bills, where the Commissioner (Adjudication) decided the proposals through the impugned order. The assessee' challenged the order passed by the Commissioner (Adjudication) before the Tribunal.

The assessee contended that they had exported iron ore fines whose Fe content was below 58% under some Shipping Bills and iron ore fines whose Fe content was above 58% under some other Shipping Bills.

Whereas it was contended by the Revenue that the assessee' had evaded duty by splitting the consignment into different Shipping Bills and availing the benefit of exemption on some Shipping Bills. Also, Fe content of the exported iron ore fines must be determined on dry weight basis.

The Tribunal observed that the DRI who issued the SCN and the Commissioner (Adjudication) who issued the impugned order completely mis-understood the provisions and assumed that they had the power to re assess the goods exported under two or more Shipping Bills together. Nothing in the Customs Act confers such power on any officer.

The Tribunal stated that the Shipping Bill is not only a declaration of the goods to be exported but is also the document through which export duty, if any, is assessed. Duty must be self- assessed by the exporter, and it can be re-assessed by the proper officer under section 17 of the Customs Act.

The Tribunal further stated that, if the exporter is entitled to the benefit of a notification in one Shipping Bill, that benefit cannot be taken away by combining the goods exported under that shipping Bill with the goods exported under another Shipping Bill, drawing a sample of the mixture of the two goods and testing it for Fe content.

“The fact that the goods under both Shipping Bills were loaded in the same vessel or even in the same hatchet of the vessel or exported to the same party would make no difference. It does not give the department the power to re-determine the duty. Conversely, if after mixing the goods exported under different Shipping Bills and drawing a sample, the Fe content falls below the threshold, the exporter cannot claim exemption for all the Shipping Bills. Each Shipping Bill must be assessed individually,” added the Bench.

In view of the above, the Tribunal allowed the appeal.

Counsel for Appellant/ Assessee: Alok Aggarwal, Sharad Shrivastava

Counsel for Respondent/ Department: S.K. Rahman

Case Title: M/S Disha Realcon Pvt Ltd V. Commissioner of Customs Adjudication

Case Number: Customs Appeal No. 54710 of 2023

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