Orissa High Court
Ocl Iron And Steels Limited vs Union Of India on 27 April, 2026
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.32424 of 2025
In the matter of an Application under Articles 226 & 227
of the Constitution of India, 1950
***
OCL Iron and Steels Limited,
(Formerly S. M. Niryat Pvt. Ltd.),
having its registered office at Godrej
Waterside, Tower-I, 5th Floor, Block DP-5,
Sector-V, Kolkata, Bidhan Nagar,
CK Market, North 24 Parganas,
Salt Lake, West Bengal-700091,
represented through its
Director Dinesh Kumar Jaiswal,
Having address at 3rd Floor, 7/B,
Temple Street near Jyoti Cinema,
Princep Street, Kolkata – 700 072. … Petitioner
-VERSUS-
1. Union of India,
through the Secretary,
Ministry of Finance,
Department of Revenue,
Government of India,
having its Office at North Block,
New Delhi – 110 001.
2. Commissioner of Customs (Preventive),
Bhubaneswar Commissionerate, Bhubaneswar,
Having office at 1st Floor,
Central Revenue Building,
Rajaswa Vihar, Bhubaneswar
Odisha – 751 007. …Opposite parties.
W.P.(C) No.32424 of 2025 Page 1 of 70
Counsel appeared for the parties:
For the Petitioner : Mr. V. Sridharan,
Senior Advocate
Assisted by
M/s. Saswat Kumar Acharya,
Abhisek Agarwal, Sahil Pargh
and Abhijeet Agarwal, Advocates.
For the Opposite Party Mr. Satyanarayan Pattanaik,
No.1 : Central Government Counsel
For the Opposite Party Mr. Sujan Kumar Roy Choudhury,
No.2 : Senior Standing Counsel.
P R E S E N T:
HONOURABLE CHIEF JUSTICE
MR. HARISH TANDON
AND
HONOURABLE JUSTICE
MR. MURAHARI SRI RAMAN
Dates of Hearing : 09.03.2026 :: Date of Judgment : 27.04.2026
J UDGMENT
MURAHARI SRI RAMAN, J.–
Assailed in the writ petition is the Order-in-Original
No.02/CC(P)/BBSR/CUS/Commissioner/2025, dated
24.09.2025 passed by the Commissioner of Customs
(Preventive), Bhubaneswar-opposite party No.2
(Annexure-11) finally assessing the transactions ofW.P.(C) No.32424 of 2025 Page 2 of 70
export of iron ore fines under the Customs Act, 1962, in
connection with the direction of this Court vide Order
dated 11.07.2025 passed in W.P.(C) No.6323 of 2025.
The petitioner, beseeching invocation of power under
Articles 226 and 227 of the Constitution of India, prayed
for grant of following relief(s):
―In view of the aforesaid facts and circumstances, it is
humbly prayed that this Hon’ble Court may kindly be
pleased to:
A. Admit the writ petition and issue appropriate writ(s)
quashing the impugned Order-in-Original dated
24.09.2025 passed by the opposite party No.2 under
Annexure-11, and all consequential penalty and
other proceedings arising therefrom;
B. Pass such other order (s) as may be deemed just
and proper in the interest of justice;
And for this act of kindness, the Petitioner as in duty
bound shall ever pray.‖
Facts:
2. Pertinent factual matrix leading to filing of the writ
petition before this Court is narrated hereunder.
2.1. The petitioner (formerly known as S.M. Niryat Pvt. Ltd.,
for short, “SMNPL”), is engaged in the business of export
of iron ore fines through established maritime trade
routes.
W.P.(C) No.32424 of 2025 Page 3 of 70
2.2. The former company, i.e., SMNPL, had preferred W.P.(C)
No.2834 of 2021 before this Court seeking directions
upon the Deputy Commissioner, Paradip Customs
Division, Odisha, for completion of final assessment of
shipping bills relating to exports made during the period
from 09.07.2018 to 13.10.2020 in accordance with
Circular No.04/2012-Cus dated 17.02.2012, issued by
Central Board of Excise and Customs (for short, “CBEC”)
on Wet Metric Tonne (“WMT”, abbreviated) basis and in
tune with the principles set forth in the judgments
rendered by the Hon’ble Supreme Court of India and
various other High Courts in this regard which have
been consistently followed by the Custom, Excise and
Service Tax Appellate Tribunal including the statutory
authorities. This Court vide order dated 19.02.2021
directed as follows:
―5. Considering the submissions made, it is directed
that after furnishing the requisite documents, not
later than 12th April 2021, the Opposite Party will
give the Petitioner an opportunity of being heard and
after taking into account the circulars, judgments
and any other document that the Petitioner seeks to
rely upon pass a reasoned order, not later than 3rd
May, 2021. The said order will be communicated to
the Petitioner, not later than 10th May, 2021. The
date of hearing be intimated to the Petitioner at least
one week in advance.
6. The writ petition is disposed of in the above terms.‖
W.P.(C) No.32424 of 2025 Page 4 of 70
2.3. Based on specific intelligence received from the
Directorate of Revenue Intelligence, Kolkata Zone Unit
alleging misdeclaration of iron ore fines (Fe content),
exported from India, the petitioner was issued with
Demand-cum-Show-Cause Notice, dated 18.12.2023
(“SCN”, for brevity) alleging liability of customs duty to
the tune of Rs.256,95,38,408/- (approximately) along
with applicable interest and penalty thereof. In response
to thereto, written replies dated 21.10.2024 and
01.02.2025 vide Annexure-4 and Annexure-5
respectively were filed objecting that the calculation
sought to be made by the Adjudicating Authority
indicating Fe content of the exported iron ore fines
would be more than 58% on dry metric tonne
(abbreviation, “DMT”) basis as per norm prescribed by
the Bureau of Indian Standards, i.e., I.S.1493-1959
[IS1493-1 (1981)] reaffirmed in 2016, as such a course
would not be in consonance with the Circular(s) issued
by the CBEC and principles laid down by different
Courts.
2.4. Flagging that the Commissioner of Customs (Preventive),
Bhubaneswar Commissionerate proposed to redetermine
the value of the shipping bills under Section 14 of the
Customs Act, 1962 pertaining to exports of iron ore fines
made during the period from 09.07.2018 to 02.04.2022
on DMT basis, the petitioner challenging the said SCNW.P.(C) No.32424 of 2025 Page 5 of 70
invoked writ jurisdiction by way of an application under
Article 226/227 of the Constitution of India, which was
registered as W.P.(C) No.6323 of 2025 before this Court.
2.5. During pendency of said writ petition, the petitioner was
issued with a personal hearing notice dated 10.07.2025
fixing the date of personal hearing on 28.07.2025.
2.6. This Court disposed of aforesaid W.P.(C) No.6323 of
2025 by order dated 11.07.2025, with the following
observation:
―7. The Petitioner appears to have filed reply dated 1st
February, 2025 (vide Annexure-8) in connection with
Show Cause Notice dated 18th December, 2023
before the Commissioner of Customs (Preventive),
Commissionerate at Bhubaneswar and the said
authority till date has not proceeded to finalise the
shipping bills.
8. It is true, as argued by Sri Tusar Kanti Satapathy,
learned Senior Standing Counsel, that touching merit
of the matter by laying guidelines to proceed with
the determination of Fe contents of iron ore fines
which were exported would affect adversely the
final assessment which is required to be based on
fact-finding based on evidence available on record
by applying appropriate law to such facts.
Nonetheless, it needs to be observed that the said
authority, while finalizing the provisional
assessment, shall have to take into account not only
the material placed before him but also decide
whether relevant decisions suggesting method of
W.P.(C) No.32424 of 2025 Page 6 of 70
determination of Fe contents of iron ore fines
exported are applicable along with Circular
No.04/2012-Cus., dated 17th February, 2012 issued
by the Ministry of Finance, Department of Revenue,
Central Board of Excise and Customs.
8.1. It, therefore, needs to be emphasized without
expressing any opinion touching the merit of the
matter that the authority concerned shall proceed to
complete the final assessment taking into
consideration the reply as stated to have been
submitted by the Petitioner vis-Ã -vis materials
available on record.
8.2. For the said purpose, the Petitioner is, therefore,
directed to appear before the concerned authority
along with copy of this Order on or before 25th July,
2025. On the date of such appearance, the authority
may proceed to finalise the provisional assessment
forthwith or may adjourn the proceeding for a future
date as he deems appropriate. However, after
affording a reasonable opportunity of hearing, he
shall conclude the proceeding. It is further directed
that while petitioner-assessee shall not be granted
unnecessary adjournments if date(s) is fixed beyond
25.07.2025, the authority concerned shall complete
the entire process of finalization within a period of
two months from the date of appearance of the
Petitioner as stipulated above.
9. With the aforesaid observation and direction, the
Writ Petition is disposed of. Pending Interlocutory
Applications, if any, are disposed of accordingly.‖
2.7. The petitioner filed written note dated 21.07.2025 by
persisting that the authority may finalise the subject
W.P.(C) No.32424 of 2025 Page 7 of 70
shipping bills keeping in view the applicable Circulars
and Judgments in this regard.
2.8. The petitioner filed a detailed additional reply dated
25.08.2025, which was filed before the opposite party
No.2-Commissioner of Customs (Preventive) on
28.07.2025 during the course of personal hearing.
2.9. The Order-in-Original dated 11.07.2025 and
Corrigendum dated 14.10.2025 (Annexures-11 and 12
respectively) thereto have been passed by the opposite
party No.2. Dissatisfied with the modalities adopted by
the Commissioner of Customs (Preventive) in raising
such demand by fixing liability towards duty on account
of export of iron ore fines on DMT basis the present writ
petition has been filed.
Hearing:
3. At the outset Sri Sujan Kumar Roy Choudhury, learned
Senior Standing Counsel raised objection against
entertainment of writ petition against the Order-in-
Original citing Union of India Vrs. T.R. Verma, (1958) 1
SCR 499; Radha Krishan Industries Vrs. State of
Himachal Pradesh, (2021) 3 SCR 406 and Rikhab Chand
Jain Vrs. Union of India, (2025) 152 GSTR 809 (SC) to
urge that when an alternative and equally efficacious
remedy is open for the litigant, he should be required to
pursue that remedy and not to invoke the special
W.P.(C) No.32424 of 2025 Page 8 of 70
jurisdiction of the High Court and when such remedy
exists, it will be a sound exercise of discretion to refuse
to interfere in a petition under Article 226 of the
Constitution of India unless there are good grounds
therefor. Nevertheless, Sri V. Sridharan, learned Senior
Advocate strongly opposing such a stance of the learned
Senior Standing Counsel submitted that the
methodology to be adopted for determination of Fe
content with respect to transaction of export of iron ore
fines as has been enunciated by the Courts having not
been followed by the Adjudicating Authority, the
recourse to avail remedy by way of invoking writ
jurisdiction is not absolute bar. Taking into
consideration the contents of the writ petition, nature of
challenge and the tenor of adjudication, it is felt apt to
entertain this writ petition for limited purpose to
adjudicate whether the transactions in question are to
be considered DMT basis. In such view of the matter, on
the consent of the learned counsel for the respective
parties, this matter is taken for final hearing.
3.1. Heard Sri V. Sridharan, learned Senior Advocate being
assisted by Mr. Saswat Acharya, Mr. Abhisek Agarwal
and Mr. Abhijeet Agarwal, Advocates and Sri
Satyanarayan Pattanaik, learned Central Government
Counsel appearing for opposite party No.1 and Sri Sujan
W.P.(C) No.32424 of 2025 Page 9 of 70
Kumar Roy Choudhury, learned Senior Standing
Counsel appearing for opposite party No.2.
3.2. Hearing being concluded, the matter was reserved for
preparation and pronouncement of Judgment.
Submissions of counsel for respective parties:
4. Sri V. Sridharan, learned Senior Advocate assisted by
Mr. Saswat Kumar Acharya, learned Advocate would
submit that the determination of value of the goods
exported for the purpose of levy of customs duty being
made by computing the Fe content on DMT basis and
thereby refuting the benefit of exemption claimed by the
petitioner is unconscionable and such action of the
authority is only to drag the transactions of export
effected by the petitioner into the net of taxation.
4.1. Explaining further it is narrated that there exists two
distinct classifications for the purpose of such
assessment: viz., firstly, iron ore containing iron (Fe)
content equal to or exceeding 58% is categorized as
high-grade iron ore/fines, and secondly, iron ore/fines
containing less than 58% of Fe content is categorized as
low-grade iron ore. The CBEC vide Circular No.
04/2012-Cus dated 17.02.2012, has explicitly clarified
that for the purpose of determining the Fe content of
iron ore/fines, the same is required to be computed on
WMT basis in order to maintain uniformity across all
W.P.(C) No.32424 of 2025 Page 10 of 70
Customs Houses. The activity of export of iron ore
undertaken by the petitioner-company during the
relevant period, as well as prior and subsequent thereto,
were executed through various ports across India, i.e.
Paradip Port, Gopalpur Port, Haldia Port and
Visakhapatnam Port. Having all such exports being duly
assessed by the respective customs authorities on the
basis of WMT by adhering to the applicable CBEC
Circular(s) and prevailing legal principles, the subject
adjudication on the basis of DMT could not have been
done so as to refuse legitimate claim of exemption
inasmuch as Fe content of exported iron ore/fines did
not exceed 58%. Such a course would result in
classification of the goods so exported as high-grade iron
ore, which is contrary to the well-established and legally
recognized method of assessment, i.e., WMT basis.
4.2. In furtherance to what is submitted, it is made explicit
that the Commissioner of Customs (Preventive) could not
have taken divergent view at different times by changing
his opinion with respect to different shipping bills. It is
highlighted by the petitioner that the said authority
adopted the method of WMT with regard to the previous
and post shipping bills to the instant shipping bill
against which current SCN was issued. Despite the fact
that the position of law remains the same and the
transactions of export were prior to the statutory
W.P.(C) No.32424 of 2025 Page 11 of 70
amendment, the Commissioner of Customs could not
take prevaricating stance to determine the value of the
goods exported on DMT basis. This exercise of power by
the authority concerned throwing the rule of law and
consistency in approach to the winds cannot be above
reproach.
4.3. Factually the petitioner sought to explain that:
i. the Commissioner of Customs has levelled an
allegation that the petitioner is engaged in a
deliberate practice of purchasing high grade iron
ore fines from the mines and traders but it
intentionally declared the same as low grade iron
ore in the shipping bills and export documents
submitted to customs to evade applicable customs
duty and certificates from China’s Entry-Exit
Inspection and Quarantine (“CIQ”, for brevity)
confirmed Fe content of more than 58% in certain
cases.
ii. As against such allegation, in response thereto, the
petitioner would place that the declarations made
by it in the shipping bills was based on the pre
shipment inspection done by Therapeutics
Chemical Research Corporation1 (“TCRC”) and1 Most commonly in India, TCRC refers to the Therapeutics Chemical Research
Corporation (now known as TCRC Quality Controls LLP ). It is a prominent
third-party inspection and testing agency widely recognized by customs
W.P.(C) No.32424 of 2025 Page 12 of 70
National Accreditation Board for Testing and
Calibration Laboratories2 (“NABL”) accredited
laboratory with international operations and
creditability. Without taking into consideration the
contemporaneous document the Commissioner,
Customs having determined the Fe content of the
iron ore fines being shipped outside India based on
his own whims and fancies, the fact finding is not
only perverse, but also infirm in law. Choosing to
rely upon documents like China’s Entry-Exit
Inspection and Quarantine in preference to his own
view expressed while finalising other shipping bills
for different period considering the report of the
Central Revenues Control Laboratory would
warrant interference in the impugned Order-in-
Original.
iii. It is pointed out that the statement(s) recorded
under Section 108 of the Customs Act ought not to
have been relied upon for the simple reason that
the same is untested in view of non-compliance of
authorities for certifying the quality and quantity of cargo. Webportal:
https://www.tcrcgroup.com/ describes TCRC as, “pioneers in the realm of
Third-Party Inspection, we specialize in pre-shipment and shipment
inspections, encompassing comprehensive quality assurance, cargo supervision,
and meticulous analysis of various commodities crucial to both export and
import sectors”.
2 Webportal: https://nabl-india.org/introduction describes, National
Accreditation Board for Testing and Calibration Laboratories (NABL) is an
accreditation body, with its accreditation system established in accordance with
ISO/IEC 17011. “Conformity Assessment- Requirements for Accreditation
bodies accrediting conformity assessment bodies”.
W.P.(C) No.32424 of 2025 Page 13 of 70
prescribed manner provided in Section 138B. The
material collected from the third parties from their
electronic devices by the Customs Department
could not be admitted or relied upon as evidence
inasmuch as there is absence of certification in
terms of Section 65B of the Evidence Act, 1872. In
Ankit Kapoor Vrs. Commissioner of Customs (Port),
Kolkata, 2018 SCC OnLine Cal 7121 it has been laid
down as:
―An investigation is undertaken by an officer duly
authorized in that behalf with regard to any
infraction of Customs Act, 1962. It is in the course of
such investigation, statements of witnesses are
taken under Section 108 of the Customs Act, 1962.
The investigating authority on the basis of materials
available, including statements under Section 108 of
the Customs Act, 1962, issues a show cause notice.
The show cause notice is issued under Section 124
of the Customs Act, 1962 and is to be adjudicated
upon by the persons delineated under Section 122 of
the Customs Act, 1962. In the adjudicating
proceedings, the prosecution is entitled to refer
to and rely upon evidence of natural persons. It
is at that material point of time, that is, when
evidence of natural persons is relied upon
before the adjudicating authority that, the
prosecution should produce the natural
persons witnesses and offer cross-examination
to the delinquent. In the facts of the present case,
it does not appear that, the prosecution had offeredW.P.(C) No.32424 of 2025 Page 14 of 70
the petitioner herein an opportunity to cross-examine
the witnesses produce on their behalf.‖In Lakshman Lal Das Vrs. Chief Commissioner of
Customs, 2018 SCC OnLine Cal 17002 it is
observed as follows:
―In an adjudication proceeding which is adversarial
in nature, a party adducing evidence through a
natural person is required to allow cross-
examination of such natural person, to the other
side. In the present case apparently the prosecution
was relying upon evidence adduced by natural
persons in the proceeding. The prosecution,
therefore, ought to have allowed such persons
to be cross-examined. The petitioner made a
request to the adjudicating authority for an
opportunity to cross-examine. Such request was
made by the written notes of defence. The
adjudicating authority took such written request on
record. However, it did not allow the petitioner to
cross-examine the prosecution witness. It did not
deal with the request for cross-examination, in
the impugned order. It is not necessary that, a
party to a proceeding, specify the reason why
it requires the cross-examination of the
witness. When, a contesting party in adversarial
litigation adduced evidence through a natural
person, it results in a corresponding right to the
opposite party in such adversarial proceeding to
cross-examine such natural person. In absence of
such cross-examination being allowed or
facilitated the evidence given by such natural
person has no evidentiary value and cannotW.P.(C) No.32424 of 2025 Page 15 of 70
relied upon. The Adjudicating Authority not having
considered the request for grant of cross-
examination of the prosecution witness, the
impugned order stands vitiated by breach of the
principles of natural justice. The impugned order is
quashed. This order will not prevent the adjudicating
authority to proceed a fresh from the stage reached
on April 25, 2018 or from such stage it deems
appropriate. It is expected that, the adjudicating
authority will keep the request of the
petitioner to cross-examine the witnesses noted
in its written notes of defence, in accordance
with law.‖iv. Continuing further it is stated that the
Commissioner of Customs arrived at perverse
conclusion based on the observations of the
Directorate of Revenue Intelligence, Kolkata Zonal
Unit without paying due attention to the replies of
the petitioner and his own findings while finalizing
the certain other transactions of export qua
shipping bills presented by the instant petitioner.
v. Opposing the allegation of submission of forged
documents and collusion with laboratories, agents
and officials, it is submitted that such fact is
absolutely baseless and unfounded. Blindly relying
on the investigation report of the Directorate of
Revenue Intelligence, Kolkata Zonal Unit without
applying independent mind, the opposite party
No.2 fell in grave error of law. The petitioner asserts
W.P.(C) No.32424 of 2025 Page 16 of 70
that no iota of evidence is forthcoming from the
opposite parties to hint that the documents
submitted at the time of export of goods were forged
or the transit permits in Form-I were fake/forged.
Thus, the documents said to be collected from the
possession of third parties and the alleged data
retrieved from their mobile phones and laptops,
cannot be treated as sacrosanct and having
evidentiary value for utilisation against the
petitioner.
5. By way of written note of submission dated 05.12.2025,
the opposite parties objected entertainment of writ
petition by stating that “due process of investigation”
was undertaken which culminated in passing of Order-
in-Original. The petitioner having under-reported the Fe
content to avail the benefit of exemption from payment
of customs duty deliberately disclosed the iron ore fines
to be of less than 58% Fe content. During the course of
investigation the Directorate of Revenue Intelligence
having taken care of export data, examination of
procurement sources, forensic analysis of digital devices
and statements recorded under Section 108 of the
Customs Act, no infirmity could be imputed into the
adjudication made vide Order-in-Original. It is, thus,
submitted by the learned Senior Standing Counsel that
the value of transactions could be correctly assessedW.P.(C) No.32424 of 2025 Page 17 of 70
adhering to the provisions provided under Rule3:
“Determination of the method of valuation” and Rule 8:
“Rejection of declared value” of the Customs Valuation
(Determination of Value of Export Goods) Rules, 2007.
5.1. The Adjudicating Authority having considered details of
material available on record demonstrated that the
petitioner committed fraud systematically by following a
particular pattern. Discrepancies were noticed on
analysis of Form E submitted by the petitioner whereby
it could be ascertained that high grade iron ore fines
were exported which have Fe content bearing more than
58%.
5.2. It is canvassed by Sri Sujan Kumar Roy Choudhury,
learned Senior Standing Counsel that declaring low
grade iron ore fines to hoodwink the Customs
Authorities adopting dubious device by generating
reports of certain laboratories the petitioner could
manage to export the goods to outside the country
without payment of customs duty. From the report of
Directorate of Revenue Intelligence discrepancies in
documents furnished by the petitioner could be noticed
and the petitioner colluded with the laboratories,
dummy firms, port authorities, port brokers and the
exporter-company and manipulated quality certificates
and documents. The Commissioner of Customs,
Preventive while adjudicating the shipping bills in
W.P.(C) No.32424 of 2025 Page 18 of 70
question examined and correlated diverse pieces of
evidence like statements, forensic reports, electronic
data, permits, invoices, and quality test reports to form a
coherent depiction of systematic fraud.
5.3. Expanding his argument further the learned Senior
Standing Counsel put forth his submission that Circular
No.04/2012, dated 17.02.2012 ipso facto cannot be
made applicable in every circumstances. When the
petitioner is seen to have perpetrated fraud on the
authority and the overwhelming evidence available on
record to depict that the recipient outside the country
having confirmed to have received iron ore fines of more
than 58% Fe content, the petitioner cannot be protected
under the umbrella of such Circular. The Adjudicating
Authority having proceeded on the basis of factual
analysis of the material on record and applied the
correct method to raise the demand by determining
liability by levying duty on the exported goods on DMT
basis, the petitioner cannot be allowed to circumvent
alternative remedy provided under the statute for
ventilation of grievance on facts as well as in law.
5.4. Sri Sujan Kumar Roy Choudhury, learned Senior
Standing Counsel drew attention of this Court to Section
143 of the Customs Act to suggest that it is imperative3 Section 14 of the Customs Act, 1962 stands thus:
―14. Valuation of goods.–
W.P.(C) No.32424 of 2025 Page 19 of 70
on the part of the Customs Authorities to levy customs
duty on the “transaction value”. As in the subject-
transactions value furnished are incorrect, the value
disclosed by the petitioner cannot be taken as the true(1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other
law for the time being in force, the value of the imported goods and export
goods shall be the transaction value of such goods, that is to say, the price
actually paid or payable for the goods when sold for export to India for
delivery at the time and place of importation, or as the case may be, for
export from India for delivery at the time and place of exportation, where
the buyer and seller of the goods are not related and price is the sole
consideration for the sale subject to such other conditions as may be
specified in the rules made in this behalf:
Provided that such transaction value in the case of imported goods shall
include, in addition to the price as aforesaid, any amount paid or payable
for costs and services, including commissions and brokerage, engineering,
design work, royalties and licence fees, costs of transportation to the place
of importation, insurance, loading, unloading and handling charges to the
extent and in the manner specified in the rules made in this behalf:
Provided further that the rules made in this behalf may provide for,–
(i) the circumstances in which the buyer and the seller shall be
deemed to be related;
(ii) the manner of determination of value in respect of goods when
there is no sale, or the buyer and the seller are related, or price is
not the sole consideration for the sale or in any other case;
(iii) the manner of acceptance or rejection of value declared by the
importer or exporter, as the case may be, where the proper officer
has reason to doubt the truth or accuracy of such value, and
determination of value for the purposes of this section:
Provided also that such price shall be calculated with reference to the rate
of exchange as in force on the date on which a bill of entry is presented
under section 46, or a shipping bill of export, as the case may be, is
presented under section 50.
(2) Notwithstanding anything contained in sub-section (1), if the Board is
satisfied that it is necessary or expedient so to do, it may, by notification
in the Official Gazette, fix tariff values for any class of imported goods or
export goods, having regard to the trend of value of such or like goods,
and where any such tariff values are fixed, the duty shall be chargeable
with reference to such tariff value.
Explanation.–
For the purposes of this section–
(a) ―rate of exchange‖ means the rate of exchange–
(i) determined by the Board, or
(ii) ascertained in such manner as the Board may direct,
for the conversion of Indian currency into foreign currency or
foreign currency into Indian currency;
(b) ―foreign currency‖ and ―Indian currency‖ have the meanings
respectively assigned to them in clause (m) and clause (q) of
section 2 of the Foreign Exchange Management Act, 1999 (42 of
1999).‖
W.P.(C) No.32424 of 2025 Page 20 of 70
and correct figures. He vehemently contested the
submissions of the learned Senior Counsel appearing for
the petitioner to countenance the reasons contained in
the Order-in-Original that applying WMT would
legitimise false data relating to “transaction value”.
5.5. In furtherance to what is submitted hitherto, learned
Senior Standing Counsel would suggest that customs
duty being levied on the import or export of the goods
into or from India, such levy is guided by the statutory
provisions contained in the Customs Act, 1962 and the
rate of duty applicable is derived from the Customs Tariff
Act, 1975 coupled with notifications issued from time to
time thereunder.
5.6. Having drawn support from the findings returned by the
Commissioner of Customs (Preventive) in the Order-in-
Original he forcefully urged that the petitioner is
obligated to disclose true and correct figures of Fe
contents of the iron ore fines exported by way of
furnishing declaration in Form E and the transaction
value. As it is inconceivable that the Fe content of the
iron ore fines during export would change, the recipient
having affirmed to have received the iron ore fines with
Fe content at more than 58%, the declaration made by
the petitioner has rightfully been held to be deliberately
tampered with. It is asserted by the opposite parties
that:
W.P.(C) No.32424 of 2025 Page 21 of 70
―The customs duty in the shipping bills covered under the
instant SCN dated 18.12.2023 shall be assessed based
on the truthful Fe content declaration as declared in Form
E. Fe content of iron ore fines cannot decrease during
transit. The exporter’s Form E declared high grade ore
(>58% Fe), yet the shipping bills claimed lower Fe content
(<58% Fe). Such a discrepancy is impossible without
deliberate suppression, which makes the Circular’s WMT
methodology irrelevant and inapplicable in this context.‖5.7. Therefore, it is argued that by misstating the Fe content
lower than that it actually is, the exporter paid less or nil
customs duty, which resulted in huge revenue loss.
6. On 09.03.2026 in course of hearing Sri V. Sridharan,
learned Senior Advocate referring to written note of
submissions of even date confined his submission to say
that “the sole and entire foundation of the proceedings in
the Show Cause Notice (SCN) is that the Fe content must
be computed only on a Dry Metric Tonne (“DMT”) basis”
and “it cannot be on Wet Metric Tonne (“WMT”) basis.
Drawing attention of this Court to paragraphs 2.1, 4.1 to
4.6, 8.2, 8.3 and 17.5.3 to 17.5.7, it is submitted that
each shipping bill under the heading “proper assessable
quantity in dry basis” shows percentage of Fe content on
dry basis and the annexures appended to SCN reveals
that “description: re-determined according to outcome of
investigation”. It is further contended that the SCN in
the Annexures-A2, B2 and C2 forming part of Annexure-
A indicates specific column titled “Assessable Fe % (on
W.P.(C) No.32424 of 2025 Page 22 of 70
dry basis)”. Therefore, he contended that the sole basis
for demand of duty by the Commissioner of Customs is
by adopting Fe content on DMT basis.
6.1. Laying emphasis on the Circular dated 17.02.2012 and
decisions rendered by the Hon’ble Supreme Court of
India, the Hon’ble High Courts and the learned Customs,
Excise and Service Tax Appellate Tribunal, the learned
Senior Advocate for the petitioner submitted that when
the basis of calculation is erroneous and flawed with the
assessment vide Order-in-Original cannot be held to be
valid being vulnerable and bad for erroneous application
of law.
Analysis and discussion:
7. Factually no dispute subsists as to the disclosure of
transaction value and payment of customs duty on WMT
basis at the time of export of iron ore fines. From the
arguments advanced by the learned Senior Standing
Counsel it is untrammelled that high grade iron ore fines
having more than 58% Fe content being exported, the
petitioner perpetrated fraud, which denudes its right to
be assessed on the basis of WMT.
7.1. Paragraphs 17.5.3, 17.5.4 and 17.5.5 of the SCN
indicate that the Commissioner of Customs got swayed
away by the change in regime in adopting method of levy
of duty by taking into account Fe content on DMT basis.
W.P.(C) No.32424 of 2025 Page 23 of 70
For benefit of understanding, said paragraphs are
extracted and quoted hereunder:
―17.5.3. The sale-purchase contracts entered into by the
exporter with their overseas buyers, contain
the clause, ―The parties agree that for the
purpose of this agreement, the pricing of iron
ore fines shall be based on the Fe content on
dry basis or DMT basis‖. The instant exporter
has also realised export proceeds on Dry basis
for classification of export goods under the
Customs Tariff, and consequent assessment
and payment of export duty.
17.5.4. From the discussions above, it is clear that
both the judgment of Hon’ble Supreme Court
and Board’s Circular No. 04 of 2012-Customs
were issued from the perspective of
assessment of duty at specific rate i.e. on
weight basis means the determining factor was
―total weight‖. The order itself clearly specifies
that this holds when ―the duty is relatable to
weight‖. However, that regime of levying export
duty at specific rate has changed, and once
there is change in law, it is a settled legal
proposition that a Judgment issued in respect
of the earlier legal landscape no longer holds
precedential or binding value. At present, the
duty is on ad-valorem basis, and the
determining factor is “Value”, which in the
instant case has been negotiated on DMT
basis. Therefore, considering ratio laid down in
the decision of Hon’ble Supreme Court, the fact
that the contracts were clearly designated on
DMT basis and specified that Fe% should be
W.P.(C) No.32424 of 2025 Page 24 of 70
determined on dry basis, and that export
proceeds have also been realized on dry basis,
determination of Fe% for the purpose of tariff
classification and calculation of export duty
should also be on dry basis.
17.5.5. At the outset, it may be observed that the
Circular No.04 of 2012-Customs only talks
about determining the Contents of Iron Ore’ by
way of deducting the weight of impurities
including moisture to arrive at the Net Fe
content in absolute terms and not any ratio
terms. This was an important clarification
inasmuch as duty at that point of time to which
the judgment mentioned supra relates to, was
calculated on the basis of weight, unlike today
when the duty is determined on ad-valorem
basis.
The judgment therefore is not relevant to the
facts and circumstances of the instant case
inasmuch as duty today is no longer
chargeable or relatable on weight basis.
SMNPL, vide their submissions in Court, are
attempting to twist these facts and settled legal
positions. Their submissions are not backed by
logic, facts on record, or international trade
practices.”‖
7.2. From the above narration culled out from the SCN it
could be perceived that the Commissioner, Customs has
proceeded on the foundation that the exporter realised
the consideration on DMT basis, and therefore, he
W.P.(C) No.32424 of 2025 Page 25 of 70
undertook to assess the exported goods on the DMT
basis.
7.3. At this juncture it may be relevant to take note of
charging provision provided in the Customs Act, 1962,
which reads as follows:
―Section 12.
Dutiable goods.–
(1) Except as otherwise provided in this Act, or any
other law for the time being in force, duties of
customs shall be levied at such rates as may be
specified under the Customs Tariff Act, 1975 (51 of
1975), or any other law for the time being in force,
on goods imported into, or exported from, India.
(2) The provisions of sub-section (1) shall apply in
respect of all goods belonging to Government as they
apply in respect of goods not belonging to
Government.‖7.4. Section 16 provides for ―Date for determination of rate of
duty and tariff valuation of export goods‖, which reads
thus:
―(1) The rate of duty and tariff valuation, if any,
applicable to any export goods, shall be the rate and
valuation in force,–
(a) in the case of goods entered for export
under section 50, on the date on which the
proper officer makes an order permittingW.P.(C) No.32424 of 2025 Page 26 of 70
clearance and loading of the goods for
exportation under section 51;
(b) in the case of any other goods, on the date of
payment of duty.
(2) The provisions of this section shall not apply to
baggage and goods exported by post.‖7.5. Provisions of Section 50 and Section 51 of the Customs
Act, 1962 are reproduced hereunder:
―Clearance of export goods
50. Entry of goods for exportation.–
(1) The exporter of any goods shall make entry thereof
by presenting electronically on the customs
automated system to the proper officer in the case of
goods to be exported in a vessel or aircraft, a
shipping bill, and in the case of goods to be exported
by land, a bill of export in such form and manner as
may be prescribed.
Provided that the Principal Commissioner of Customs
or Commissioner of Customs may, in cases where it
is not feasible to make entry by presenting
electronically on the customs automated system,
allow an entry to be presented in any other manner.
(2) The exporter of any goods, while presenting a
shipping bill or bill of export, shall make and
subscribe to a declaration as to the truth of its
contents.
W.P.(C) No.32424 of 2025 Page 27 of 70
(3) The exporter who presents a shipping bill or bill of
export under this section shall ensure the following,
namely:–
(a) the accuracy and completeness of the
information given therein;
(b) the authenticity and validity of any document
supporting it; and
(c) compliance with the restriction or prohibition, if
any, relating to the goods under this Act or
under any other law for the time being in force.
51. Clearance of goods for exportation.–
(1) Where the proper officer is satisfied that any goods
entered for export are not prohibited goods and the
exporter has paid the duty, if any, assessed thereon
and any charges payable under this Act in respect of
the same, the proper officer may make an order
permitting clearance and loading of the goods for
exportation:
Provided that such order may also be made
electronically through the customs automated
system on the basis of risk evaluation through
appropriate selection criteria:
Provided further that the Central Government may,
by notification in the Official Gazette, permit certain
class of exporters to make deferred payment of said
duty or any charges in such manner as may be
provided by rules.
(2) Where the exporter fails to pay the export duty,
either in full or in part, under the proviso to sub-
W.P.(C) No.32424 of 2025 Page 28 of 70
section (1) by such due date as may be specified by
rules, he shall pay interest on said duty not paid or
short-paid till the date of its payment at such rate,
not below five per cent and not exceeding thirty-six
per cent per annum, as may be fixed by the Central
Government, by notification in the Official Gazette.‖
7.6. Cursory glance at the above provisions, they clearly
envisage that the taxable event is the export and/or
delivery of goods for clearance. It is the taxable event
which is determinative character for levy of customs
duty. On the occurrence of export, taxable event is
charged. Section 12 of the Customs Act declares that
duties of customs shall be levied. In this context it
means not merely chargeability but also quantification of
the duty, that is the valuation of goods for the purpose of
levy of duty, the rate at which the duty should be levied
and also recovery of such duty. The expression “duties of
customs shall be levied … on goods … exported from,
India” occurring in Section 12 must be interpreted
keeping in view when the goods became chargeable to
duty and in terms of Section 16 the duty is chargeable
on the taxable event that occurs on the dates with
reference to which the goods are to be valued and the
event with reference to which the rate at which the duty
is to be levied and quantified. Goods referred to in
Section 14 are goods on which duty of customs is
chargeable by reference to their value. It would be clear
that Section 14 by itself does not lay down when or what
W.P.(C) No.32424 of 2025 Page 29 of 70
goods are chargeable to customs duty. It only deals with
valuation of the goods exported which are chargeable to
customs duty. If they are chargeable to duty and are
chargeable by reference to their value, then the value
has to be determined as laid down in Section 14.
Whether the goods exported are chargeable to duty and
if so, the point at which they become chargeable must be
determined with reference to the provisions envisaged
under Section 12 of the Customs Act.
7.7. It is trite that under all taxing statutes to consider levy
of tax/duty it is to be determined when exactly did the
taxable event occur? It is with reference to that point of
time, that the chargeability or leviability of the tax or
duty, as the case may be, has to be determined. That is
the crucial date. See, Apar Private Ltd. Vrs. Union of
India, 1985 (22) ELT 644 (Bom). In Associated Forest
Products (P) Ltd. Vrs. Assistant Collector of Customs,
(1992) 59 ELT 264 (Cal) it has been succinctly said that
what is postponed is quantification and collection and
not chargeability. While the taxable event is the crossing
of territorial waters, the rate of duty applicable is
determined based on Section 16. The provisions of
Section 16 read with Sections 50 and 51 make it
abundantly clear that the proper officer is required to
make an order permitting clearance and loading of the
goods for exportation upon being satisfied that any
W.P.(C) No.32424 of 2025 Page 30 of 70
goods entered for export are not prohibited goods and
the exporter has paid the duty assessed thereon. Since
on the date of export, there is no dispute that, the goods
being found to be less than 58% Fe content were allowed
to be exported on the WMT basis, the Commissioner of
Customs could not have applied the amended provision
by assessing the goods exported to be more than 58% Fe
content on DMT.
8. It is vociferously argued that as if the method of
computation of duty on assessment of weight of iron ore
based on DMT, as amended by virtue of the Finance Act,
2022, is attracted to the transactions of export effected
prior to such amendment, the Commissioner of Customs
has proceeded to determine the liability. It is observed at
paragraph 4.33.6 of the Order-in-Original as follows:
―For instance, they reported high grade ore in Form E to
the mining authorities, yet declared same ore as low
grade in shipping bills (based on wet basis). This
discrepancy suggests an intentional attempt to conceal
the true nature of the goods exported by them. Only after
the conclusion of the investigation and issuance of SCN
dated 18.12.2023 M/s. SMNPL claimed that Circular
04/2012 dated 17.02.2012 allows for WMT assessment.
However, before the SCN, they never challenged the DMT-
based testing conducted by TCRC or Minerals Lab, nor
did they object to contracts specifying dry-basis pricing.
They also accepted provisional assessments based on
dry-basis values. This inconsistency indicates that theirW.P.(C) No.32424 of 2025 Page 31 of 70
current claims are an afterthought designed to justify
their earlier misconduct.‖8.1. Sri V. Sridharan, learned Senior Advocate appearing for
the petitioner placing reliance on Commissioner of
Customs (Preventive) Vrs. Essel Mining and Industries
Ltd., 2026 SCC OnLine Ori 145 submitted that the
perception of the Commissioner of Customs is
inconsistent, incoherent and without logical basis
inasmuch as this Court having taken cognizance of
amendment held that ―Prior to amendment with effect
from 01.05.2022 in the Customs Tariff Act, 1975 in
pursuance of the Finance Act, 2022, the calculation was
to be made based on WMT‖. The understanding of the
Commissioner of Customs that the computation regime
suffered amendment at the time of assessment is
without comprehension. This Court in the Essel Mining
and Industries (supra) held as follows:
―8.4. The Hon’ble Supreme Court of India in the context of
applicability of law to the facts or the events during
which transactions occurred laid down in
Commissioner of Income Tax Vrs. Essar Teleholdings
Ltd., (2018) 1 SCR 502 as follows:
‗The Constitution Bench in Commissioner of Income
Tax (Central-1 New Delhi) Vrs. Vatika Township Pvt.
Ltd., (2015) 1 SCC 1 = (2014) 367 ITR 466, after
noticing the principle of Statutory Interpretation, as
noted above, has laid down the following in para 36,
37 and 39:
W.P.(C) No.32424 of 2025 Page 32 of 70
‗36. In CIT Vrs. Scindia Steam Navigation Co. Ltd.,
(1961) 42 ITR 589 = 1961 SCC OnLine SC 118
= AIR 1961 SC 1633, this Court held that as
the liability to pay tax is computed according to
the law in force at the beginning of the
assessment year i.e. the first day of April, any
change in law affecting tax liability after that
date though made during the currency of the
assessment year, unless specifically made
retrospective, does not apply to the assessment
for that year.’***’
8.5. In Reliance Industries Ltd. Vrs. Commissioner of
Sales Tax, Cuttack, (2020) 77 GSTR 225 (Ori) = 2019
SCC OnLine Ori 515 = AIR 2020 Ori 55 the principle
has been enunciated with the following opinion:
‗10. But in our considered opinion, in a tax statute,
the word ―substitute‖ is to be interpreted
strictly as per the legislative intention. It cannot
be given the retrospective effect unless
expressly provided or intention to that effect is
manifest from a bare reading of the provision.
If an ordinary interpretation is made as per the
case law relied by the petitioner, then if any
tax is increased, it cannot be realised
retrospectively, which can never be the
intention of such ―substitution‖. Therefore,
amending provision will have prospective
effect.
11. In that view of the matter, every word in a tax
statute should be interpreted strictly as it stood
on the date the taxing event exists or it occurs.
W.P.(C) No.32424 of 2025 Page 33 of 70
Thus, the argument canvassed by the learned
counsel for the petitioner is devoid of any merit,
is required to be rejected and is rejected.’
8.6. Thus, determination of iron content of the goods
exported as reflected in the Shipping Bills is to be
governed by the legal position as emanating from
Gangadhar Narsingdas Agrawal (supra)4, whereby it
can be deduced that whenever any samples are
tested, it has to be in the condition to which the
goods are exported, i.e., in gross weight which
included the moisture and other impurities.‖
8.2. Since both the counsel appearing for the respective
parties are at consensus ad idem that the shipping bills,
subject matter of assessment in the present case are of
prior to amendment of the Customs Tariff Act, 1975 by
virtue of the Finance Act, 2022. Therefore, in the
considered view of this Court as the taxable event with
respect to exported goods in question occurred prior to
amendment by virtue of the Finance Act, 2022 changing
the modality of computation of weight of iron ore fines
from WMT to DMT, the adjudication suffered set back
inasmuch as the calculation of Fe content of iron ore
fines as exported should have been made on the basis of
WMT. This view is fortified by the following observations
made in Essel Mining and Industries (supra):
4 Union of India Vrs. Gangadhar Narsingdas Agrawal, 1986 SCC OnLine Bom 506
= (1988) 33 ELT 673 (Bom) has been affirmed in Union of India Vrs. Gangadhar
Narsingdas Aggarwal, (1997) 10 SCC 305 = (1997) 68 ECR 529 = (1997) 89 ELT
19 (SC).
W.P.(C) No.32424 of 2025 Page 34 of 70
―8.2. On analysis of evidence on record, the view of the
Appellate Authority found favour with the CESTAT,
being fortified by consistent view expressed by it in
very many cases. The percentage of Fe content of
the Iron Ore Fines exported was as per report of
SKM, which examined the sample on WMT basis.
For addressing the aforesaid issue(s) relevant cases
decided have been followed by the CESTAT. It
observed that prior to the amendment of the
Customs Tariff Act, 1975, by virtue of the Finance
Act, 2022 with effect from 01.05.2022, the goods
exported were to be assessed on the basis of WMT.
Such an opinion is supported by the principles laid
down in the case of Union of India Vrs. Gangadhar
Narsingdas Agrawal, 1986 SCC OnLine Bom 506 :
(1988) 33 ELT 673 (Bom). It is observed in the said
case as follows:
‗2. 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. fromW.P.(C) No.32424 of 2025 Page 35 of 70
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.***
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 theW.P.(C) No.32424 of 2025 Page 36 of 70
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.
4. Now, the only submission urged by Mr. Rege,
learned Counsel for the appellants was that it
is not possible by a physical analysis to
determine the iron ore contents in moist lumpy
iron ore or moist iron ore fines, because such
moist iron ore fines and moist lumpy iron ore
has to be dried for finding out the iron contents.
It was urged by him that this is only method of
analysis accepted by the Indian Standard
Institute, and hence the result of that analysis
must be made applicable directly or
straightway to determine the percentage of iron
contents in the iron ore exported by the
petitioners. In our view, the submission has no
merit whatever. Although it is true, as
submitted by Mr. Rege, that moist lumpy iron
ore and moist iron ore fines have to be dried for
the purpose of determining the iron contents,
there is a mathematical formula by which, on
the basis of the results of these aforementioned
analysis, the iron content in moist lumpy iron
ore and moist iron ore fines can be easily
determined. That formula has been in fact
W.P.(C) No.32424 of 2025 Page 37 of 70
explained in a letter dated 23rd June 1978
addressed by Toman Trading Co. Ltd., a copy
of which is at Exh. ‗A’ to the petition. It appears
that following this very method, Italab (Goa)
Pvt. Ltd. have issued certificates as to the iron
content in the moist iron ore fines and moist
lumpy iron ores exported by the petitioners,
and these certificates show that the iron
content in these iron ores was to the extent of
about 57 per cent. Merely because in respect of
moist iron ore the iron content cannot be
determined directly by physical analysis this
cannot lead to the result that the iron ore
content cannot be determined at all or that the
petitioners should be deprived of their just
claim on that footing which is totally
unwarranted by law. The submission of Mr.
Rege must, therefore, fail.’
8.3. Aforesaid view of the Bombay High Court was
affirmed in Union of India Vrs. Gangadhar
Narsingdas Aggarwal, (1997) 10 SCC 305 = (1997)
68 ECR 529 = (1997) 89 ELT 19 (SC), wherein it has
been held that:
‗3. By Notification No. GSR 1152, dated 24th July,
1967 issued under Section 25(1) of the
Customs Act, the Government exempted iron
ore fines falling under Item 29 of the Second
Schedule to the Tariff Act when exported out of
India from so much of the duty leviable thereon
as is in excess of Rs. 3/- per metric ton, where
the iron content in the iron ore fines was below
62% and where it exceeds 62% so much of the
duty as is in excess of Rs. 4/- per metric ton.
W.P.(C) No.32424 of 2025 Page 38 of 70
By another Notification dated 31st August,
1968 the Government exempted lumpy iron ore
falling under Item 28 of the Second Schedule to
the Tariff Act when exported out of India from
so much of the duty as was in excess of the
duty shown in Column (iii) depending on the
iron content in the iron ore. It may here be
mentioned that the duty had to be determined
on the basis of weight of the commodity at the
relevant point of time. It may here be
mentioned that the duty had to be determined
on the basis of weight of the commodity at the
relevant point of time. In the case of lumpy iron
ore where the percentage of iron was 60% or
more but less than 63% the duty was restricted
to Rs. 6/- per metric ton, where it was 58% or
more but less than 60% it was restricted to Rs.
5/- per metric ton and where it was less than
58% it was restricted to Rs. 4/- per metric ton.
It will thus be seen that under both the
Notifications referred to above the duty was
relatable to weight depending on the iron
content in the ore or the ore fines. The question
which was posed before the High Court was
whether the percentage of iron content had to
be determined after ignoring moisture in the
lump or the percentage had to be determined
taking all the impurities including moisture into
account. The Revenue opted for the first
method whereas the assessees contended that
the percentage had to be determined taking all
the impurities including moisture into account.
The learned Single Judge in the High Court
ruled in favour of the assessee and the DivisionW.P.(C) No.32424 of 2025 Page 39 of 70
Bench agreed with the view taken by the
learned Single Judge and hence these appeals.
4. Mr. Bajpayee, the learned Counsel for the
Revenue, strongly contended that the method
of determining the iron content in the iron ore
and the iron fines is to first eliminate the
moisture and then the other impurities and
ascertain the content of iron and determine its
percentage without taking the moisture into
consideration. This, he submitted, was the
method which is normally employed under the
ISI standard as well as by Chemical Analysts
who are called upon to determine iron content
in lumpy iron ore or iron ore fines. It is
immaterial what method one adopts for the
purposes of separating the iron content from
the lumpy iron ore but the percentage has to be
determined from the total weight which was
available at the given point of time after the
iron content is determined. That is because the
duty is relatable to weight and, therefore, once
the iron content is determined keeping in mind
the total weight the percentage can be
determined separating the iron content from the
rest of the impurities inclusive of moisture and
thereafter ascertain in which category the
lumpy iron ore would fall for the purposes of
charging duty under the aforesaid
Notifications. This view which the learned
Single Judge took and which came to be
affirmed by the Division Bench of the High
Court appears to us to be the correct view to
take, for the reason that if the percentage of
iron content is determined after ignoring theW.P.(C) No.32424 of 2025 Page 40 of 70
moisture the percentage would not be relatable
to the lumpy iron ore weighed at the relevant
point of time for the purposes of charging duty.
We, therefore, do not think that the High Court
committed any mistake in the view it took.
Even if two views were possible the view taken
by the High Court being a plausible one would
not call for intervention by this Court.’ ***‖
8.3. To show bona fide the petitioner in the written notes of
submission dated 09.03.2026 (copy of which was
handed over to the learned Senior Standing Counsel)
brought out that details of all the shipping bills in
question pertaining to goods sent via Paradip Port,
Gopalpur Port, Dhamra Port, Haldia Port and Vizag Port,
as reflected at Annexures-A1, A2, B1, B2, C1 and C2
appended to Annexure-A forming part of SCN are
worksheets of the Customs Department. Said annexures
contain bill of lading quantity in WMT with proper
assessable value in DMT. The petitioner declared
percentage of Fe content at 58% and the petitioner paid
duty under protest before export of the goods. Reliance
is placed on Customs House Laboratory Letter dated
11.09.2023 to demonstrate conversion mechanism for
deriving Fe content of WMT basis from Fe content on
DMT basis and vice versa. Said Letter contains the
following:
―The iron ore fines/some varieties of iron ores are
hygroscopic in nature. The conversion of Fe content from
W.P.(C) No.32424 of 2025 Page 41 of 70
Dry Basis (DMT) to as received basis (WMT) can be
calculated in two different ways.
Following test parameters are extracted from attached
report pertaining to S/B No.8273934/Dt.28.08.2017, for
the illustration of model calculation.
1. Available total moisture
content on record : 6.1%
2. Available total iron content
on record (Dry Basis) : 53.1%Way-1 : (Mathematical Calculation
as mentioned in your letter)Formula-
Fe content as per WMT =
%Fe content per DMT (dry basis ) * (100-M)/100
(where M is % Moisture)
Fe content =
53.1 * (100-6.1)/100=49.86%
(as received basis, commonly known as WMT)
Way-2 : (Ref, Indian Standard
1493:1981 Part-1)
Step-A – Calculation of Factor K
K = 100/100-A
(A is moisture determined in test)
K = 100/(100-6.1)
K = 1.06496
W.P.(C) No.32424 of 2025 Page 42 of 70
Step-B (Calculation of Moisture on
as received basis fro DMT)
Fe on as received basis (WMT) =
Available % Fe content
on record/K = 53.1/1.06496
= 49.86%
On the basis of above two ways, one can convert Fe
content available on dry basis (DMT) to Fe content on as
received basis (WMT).‖
8.4. It may be worthwhile to refer to provisions of Section 39
and Section 40, which read thus:
―39. Export goods not to be loaded on vessel until entry-
outwards granted.–
The master of a vessel shall not permit the loading of
any export goods, other than baggage and mail
bags, until an order has been given by the proper
officer granting entry-outwards to such vessel.
40. Export goods not to be loaded unless duly passed by
proper officer.–
The person-in-charge of a conveyance shall not
permit the loading at a customs station–
(a) of export goods, other than baggage and mail
bags, unless a shipping bill or bill of export or a
bill of transhipment, as the case may be, duly
passed by the proper officer, has been handed
over to him by the exporter;
(b) of baggage and mail bags, unless their export
has been duly permitted by the proper officer.‖
W.P.(C) No.32424 of 2025 Page 43 of 70
8.5. Conjoint reading of Section 16, Section 39, Section 40,
Section 50 and Section 51 lead to conceive that loading
of goods for the purpose of export is not permissible
unless the proper officer is satisfied. The determination
of value prior to loading is an imperative requirement
and modality is prescribed in the Circular 04/2012-
Customs, dated 17.02.2012.
8.6. Circular dated 17.02.2012 reveals that:
―Circular No. 04/2012-Cus
F. No. 450/93/2011-Cus.IV
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Customs-IV Section
***New Delhi, 17th February, 2012
To
All Chief Commissioners of Customs,
All Chief Commissioners of Central Excise,
All Director Generals/
Chief Departmental Representatives (CESTAT),
All Commissioners of Customs,
All Commissioners of Central Excise and
All Commissioners of Central Excise & CustomsSir/Madam,
W.P.(C) No.32424 of 2025 Page 44 of 70
Subject: Adoption of uniform Customs Procedure for
calculating the contents of Iron Ore –
clarification– regarding.
***
Several references have been received in the Board
highlighting divergent practices for calculation of iron
contents from Iron Ore being followed at different
Ports for charging Export duty. In this regard two
types of calculation methods are being followed i.e.
on the basis of Wet Metric Ton (WMT) and other on
the basis of Dry Metric Ton (DMT).
2. Hon’ble Supreme Court in the matter of Civil Appeal
No.7539 of 1995 in case of Union of India Vrs
Gangadhar Narsingdas Aggarwal, 1997 (89) ELT 19
(SC) in order to arrive at the Iron (Fe) contents out of
Iron Ore, had held that:
‗that is because the duty is relatable to weight and
therefore, once the iron content is determined
keeping in mind the total weight, the percentage can
be determined separating the iron contents from the
rest of the impurities inclusive of moisture and
thereafter ascertain in which category the lumpy iron
would fall for the purpose of charging duty***’
3. In light of the observation by the Apex Court that
export duty is chargeable according to Fe contents,
and to maintain uniformity all over the custom
houses, it is clarified that for the purpose of charging
of export duty the assessment of Iron ore for
determination of Fe contents shall be made on Wet
Metric Ton (WMT) basis which in other words mean
deducting the weight of impurities (inclusive ofW.P.(C) No.32424 of 2025 Page 45 of 70
moisture) out of the total weight/Gross Weight to
arrive at Net Fe contents.
4. In case of any difficulty in arriving at the net Fe
content, assessment may be based on test result
which directly determines the Fe contents.
5. Pending assessments on the issue, if any, should be
finalized accordingly.
6. Difficulties, if any, faced in the implementation of
this circular, may be immediately brought to the
notice of the Board.
Yours faithfully,
(A.K.Goel)
Senior Technical Officer
Tariff Unit‖
8.7. It is evident from said circular that the assessments are
to be finalised on the basis of manner stated in the
Circular issued based on the decision rendered by the
Hon’ble Supreme Court of India. It emanates therefrom
that the export duty is chargeable according to Fe
contents, and for the purpose of charging of export duty
the assessment of iron ore for determination of Fe
contents shall be made on WMT basis which in other
words means deducting the weight of impurities
(inclusive of moisture) out of the total weight/Gross
Weight to arrive at Net Fe contents. In case of difficulty,
assessment can be based on test result which directly
determines the Fe contents. The reason ascribed by the
W.P.(C) No.32424 of 2025 Page 46 of 70
learned Senior Standing Counsel that when fraud is
alleged, the methodology specified in such Circular
cannot be adhered to has no substance.
8.8. In J.K. Lakshmi Cement Ltd. Vrs. CTO, (2016) 16 SCC
213 = (2018) 53 GSTR 305 (SC) legal sanctity regarding
circular has been stated thus:
―31. Circulars issued under tax enactments can tone
down the rigour of law, for an authority which
wields power for its own advantage is given right to
forego advantage when required and considered
necessary. This power to issue circulars is for just,
proper and efficient management of the work and in
public interest. It is a beneficial power for proper
administration of fiscal law, so that undue hardship
may not be caused. Circulars are binding on the
authorities administering the enactment but
cannot alter the provision of the enactment,
etc. to the detriment of the assessee. Needless to
emphasise that a circular should not be adverse and
cause prejudice to the assessee. (See UCO Bank Vrs.
CIT, (1999) 4 SCC 599.)
32. In CCE Vrs. Ratan Melting and Wire Industries,
(2008) 13 SCC 1, it has been held that circulars and
instructions issued by the Board are binding on the
authorities under the respective statute, but when
this Court or the High Court lays down a principle, it
would be appropriate for the Court to direct that the
circular should not be given effect to, for the circulars
are not binding on the Court. In the case at hand,
once Circular dated 15.04.1994 stands withdrawn
vide Circular dated 16.04.2001, the appellant
W.P.(C) No.32424 of 2025 Page 47 of 70
assessee cannot claim the benefit of the withdrawn
circular.
***
34. In this context, we may note another contention that
has been advanced before us. It is based upon the
doctrine of contemporanea expositio. In our
considered opinion, the said doctrine would not be
applicable and cannot be pressed into service.
Usage or practice developed under a statute is
indicative of the meaning prescribed to its
words by contemporary opinion. In case of an
ancient statute, doctrine of contemporanea expositio
is applied as an admissible aid to its construction.
The doctrine is based upon the precept that the
words used in a statutory provision must be
understood in the same way in which they are
usually understood in ordinary common parlance by
the people in the area and business. (See G.P.
Singh’s Principles of Statutory Interpretation, 13th
Edn. 2012 at p. 344.)‖
8.9. The circulars issued in exercise of statutory powers are
binding on the Department, but it would be binding so
long as the Circulars are in operation and it holds the
field. [Reference can be had to: UCO Bank Vrs. CIT,
(1999) 237 ITR 889 (SC); Steel Authority of India Vrs.
Collector of Customs, Bombay, (2000) 115 ELT 42; Paper
Products Ltd. Vrs. Commissioner of Central Excise, (2001)
247 ITR 128 (SC); Collector of Central Excise Vrs. Dhiren
Chemical Industries, (2002) 126 STC 122 (SC) = (2002)
254 ITR 554 (SC); Union of India Vrs. Azadi Bachao
W.P.(C) No.32424 of 2025 Page 48 of 70
Andolan, (2003) 263 ITR 706 (SC) = (2003) 1 RC 742 (SC);
Balaji Computers Vrs. State of Karnataka, (2006) 147
STC 269 (Kar); Union of India Vrs. Arviva Industries (I)
Ltd. Vrs. (2007) 209 ELT 5 (SC); State of Kerala Vrs.
Kurian Abraham Pvt. Ltd., (2008) 13 VST 1 (SC).]
8.10. In Paper Products Ltd. Vrs. CCE, (1999) 7 SCC 84 it has
been laid down that:
―4. The question for our consideration in these appeals
is: what is the true nature and effect of the circulars
issued by the Board in exercise of its power under
Section 37-B of the Central Excise Act, 1944? This
question is no more res integra in view of the various
judgments of this Court. This Court in a catena of
decisions has held that the circulars issued under
Section 37-B of the said Act are binding on the
Department and the Department cannot be permitted
to take a stand contrary to the instructions issued by
the Board. These judgments have also held that the
position may be different with regard to an assessee
who can contest the validity or legality of such
instructions but so far as the Department is
concerned, such right is not available. (See CCE Vrs.
Usha Martin Industries, (1997) 7 SCC 47). In the
case of Ranadey Micronutrients Vrs. CCE, (1996) 10
SCC 387 this Court held that the whole objective
of such circulars is to adopt a uniform practice
and to inform the trade as to how a particular
product will be treated for the purposes of
excise duty. The Court also held that it does
not lie in the mouth of the Revenue to
repudiate a circular issued by the Board on theW.P.(C) No.32424 of 2025 Page 49 of 70
basis that it is inconsistent with a statutory
provision. Consistency and discipline are,
according to this Court, of far greater importance
than the winning or losing of court proceedings. In
the case of CCE Vrs. Jayant Dalal (P) Ltd., (1997) 10
SCC 402 this Court has held that it is not open to the
Revenue to advance an argument or even file an
appeal against the correctness of the binding nature
of the circulars issued by the Board. Similar is the
view taken by this Court in the case of CCE Vrs.
Kores (India) Ltd., (1997) 10 SCC 338.
5. It is clear from the abovesaid pronouncements of this
Court that apart from the fact that the circulars
issued by the Board are binding on the
Department, the Department is precluded from
challenging the correctness of the said
circulars even on the ground of the same being
inconsistent with the statutory provision. The
ratio of the judgment of this Court further precludes
the right of the Department to file an appeal against
the correctness of the binding nature of the circulars.
Therefore, it is clear that so far as the Department is
concerned, whatever action it has to take, the same
will have to be consistent with the circular which is
in force at the relevant point of time.‖
8.11. It is pertinent to have regard to the observations made in
Varsha Plastics (P) Ltd. Vrs. Union of India, (2009) 3 SCC
365 = (2010) 2 GSTR 343 (SC)
―16. Section 151-A empowers the Board to issue orders,
instructions and directions to officers of Customs for
the purpose of uniformity in the classification of
W.P.(C) No.32424 of 2025 Page 50 of 70
goods or with respect to levy of duty thereon. The
said provision is as follows:
‗151-A. Instructions to officers of Customs.–
The Board may, if it considers it necessary or
expedient so to do for the purpose of uniformity
in the classification of goods or with respect to
the levy of duty thereon, issue such orders,
instructions and directions to officers of
customs as it may deem fit and such officers of
customs and all other persons employed in the
execution of this Act shall observe and follow
such orders, instructions and directions of the
Board:
Provided that no such orders, instructions or
directions shall be issued–
(a) so as to require any such officer of
Customs to make a particular assessment
or to dispose of a particular case in a
particular manner; or
(b) so as to interfere with the discretion of the
Commissioner of Customs (Appeals) in the
exercise of his appellate functions.’***
22. Rejection of the transaction value of goods by the
Customs Authority being totally an unrealistic value,
has been found to be proper by this Court in
Collector of Customs Vrs. Shibani Engg. Systems,
(1996) 10 SCC 42.
***
W.P.(C) No.32424 of 2025 Page 51 of 70
26. Rabindra Chandra Paul, (2007) 3 SCC 93 and South
India Television (P) Ltd., (2007) 6 SCC 373 also
recognise the legal position that transaction value
can be rejected if invoice price is not found to be
correct, but it is for the Department to prove that the
invoice price is incorrect.
***
27. Rule 11 of the Customs Valuation Rules also
provides that in case of dispute between importer
and the officer of the Customs valuing the goods it
shall be resolved consistent with the provisions
contained in sub-section (1) of Section 14 of the Act.
28. It has to be kept in mind that once the nature of
goods has been misdeclared, the value declared on
the imported goods becomes unacceptable. It does
not in any way affect the legal position that the
burden is on the Customs Authorities to establish
the case of misdeclaration of goods or valuation or
that the declared price did not reflect the true
transaction value.
29. Section 151-A of the Act confers upon the Board the
power to issue orders, instructions and directions to
the authorities for proper administration of the
provisions of the Act. It also provides that all
such authorities and all other persons
employed in the execution of the provisions of
the Act shall observe and follow such orders,
instructions and directions of the Board. The
proviso appended thereto states that no such orders,
instructions or directions shall be issued–
W.P.(C) No.32424 of 2025 Page 52 of 70
(a) so as to require all such officers of Customs to
make a particular assessment or to dispose of
a particular case in a particular manner or;
(b) so as to interfere with the discretion of the
Collector of Customs (Appeals) in exercise of his
appellate functions.
30. The proviso to Section 151-A makes it abundantly
clear that the Customs Officer who has to make a
particular assessment is not bound by such orders
or instructions or directions of the Board. An
assessing authority under the Act being a quasi-
judicial authority has to act independently in
exercise of his quasi-judicial powers and functions.
Section 151-A does not in any manner control or
affect the independent exercise of quasi-judicial
functions by the assessing authority.
***
34. According to the Department, the impugned Standing
Order was issued for the smooth functioning of
assessment and examination work and to bring
about uniformity in the work and it prescribes only
the pattern of assessment and in no way interferes
with the discretion of the assessment authority. In
view of the categorical stand of the Department that
the impugned Standing Order is just in the nature of
guidelines and it does not in any way interfere with
the discretion of officers, the impugned Standing
Order has to be read and understood accordingly.
***
37. The availability of evidence of contemporaneous
import of the same goods obviously provides the best
W.P.(C) No.32424 of 2025 Page 53 of 70
guide for determination of value of the imported
goods but in the absence of evidence of
contemporaneous import, reference to foreign
journals for finding out the correct international price
of imported goods may not be irrelevant because
ultimately the assessing authority has to determine
the value of the imported goods at which such goods
are sold or offered for sale in the course of
international trade at the time of importation.‖
8.12. This Court in Commissioner of Customs (Preventive),
Bhubaneswar Vrs. Chamong Tee Exports Private Limited,
2025 SCC OnLine Ori 2932 = 2025 (III) ILR-CUT 1 held as
follows:
―12. From the above quoted observations of the
coordinate bench, it is exposit that the Fe content in
IOF is to be determined on the basis of WMT and not
DMT and in view of a decision having taken in this
regard and in absence of any materials forthcoming
before us to take a different view, the said point
having settled cannot be said to be a debatable one
nor it invites any different opinion to be arrived at.
The comity of the judicial discipline demands the
uniformity in a proposition of law and the judgment
of the coordinate Bench of a Court binds the other
coordinate Bench. The only course opens to the later
coordinate Bench, in the event of dissent to refer the
matter to the Chief Justice to constitute a larger
Bench.
13. As indicated above, we do not find any material
forthcoming to take a different view and, therefore,
the judicial discipline demands the adherence of theW.P.(C) No.32424 of 2025 Page 54 of 70
judgment rendered by the coordinate Bench at an
earlier point of time. We thus do not find that the
contention of the appellant that Fe content in
IOF is to require to be determined on the basis
of DMT and not WMT is sustainable.‖
14. We further find that the appellant has taken a
different stand in the instant appeal what he took
before the Tribunal. A party cannot be permitted to
take inconsistent stand at different stages of the
proceeding. The plea taken before the Tribunal is
sought to be varicated at the stage of the instant
appeal, which in our opinion is not permissible. The
enlightening observations rendered in the case of
Dwijendra Narayan Roy Vrs. Joges Chandra De,
1923 SCC OnLine Cal 214 = AIR 1924 Cal 600 can
be gainfully applied in this regard, wherein it is
held:
‗*** It is an elementary rule that a party litigant
cannot be permitted to assume inconsistent positions
in Court, to play fast and loose, to blow hot and cold,
to approbate and reprobate to the detriment of his
opponent.: Bhaja Choudhury Vrs. Chuni Lal, 1906
SCC OnLine Cal 194 : (1906-07) 11 CWN 284; Giris
Vrs. Bepin, (1917) 27 CLJ 535; Bama Charan Vrs.
Nimai Mandal, (1933) Cal 114. This wholesome
doctrine applies not only to the successive stages of
the same suit, but also to another suit than the one
in which the position was taken up, provided that
the second suit grows out of the judgment in the
first.’***‖
W.P.(C) No.32424 of 2025 Page 55 of 70
8.13. To demonstrate there has been consistent approach of
different courts and tribunals that it is the WMT which
is relevant factor for determination of Fe content of the
exported goods for the purpose of levy of duty, the
learned Senior Advocate for the petitioner referred to:
i. Union of India Vrs. Gangadhar Narsingdas
Aggarwal, (1997) 10 SCC 305 = (1997) 68 ECR 529
= (1997) 89 ELT 19 (SC);
ii. V.M. Salgaocar and Brother Pvt. Ltd. Vs. The
Assistant Commissioner of Customs (Export) and
others, MANU/MH/3444/2022 [Bombay High Court
(Goa Bench)];
iii. Commissioner of Customs (Preventive), BBSR Vrs.
Kai International Private Limited, (2025) 29 Centax
178 (Ori);
iv. Commissioner of Customs (Preventive),
Bhubaneswar Vrs. Chamong Tee Exports Private
Limited, 2025 SCC OnLine Ori 2932 = 2025 (III) ILR-
CUT 1;
v. Commissioner of Customs (Preventive) Vrs. Essel
Mining and Industries Ltd., 2026 SCC OnLine Ori
145.
8.14. It is held in CCE Vrs. Frick India Ltd., (2007) 14 SCC 31
that the concept of “classification” is different from the
concept of “valuation”5. Thus, as demonstrated by the
5 In Commissioner of Central Excise Vrs. Frick India Limited, (2007) 10 SCR 172 it
has been observed thus:
―14. Chargeability from excise duty is on the manufacture of excisable goods.
The assessee has to pay duty on the manufacture of such goods. With
W.P.(C) No.32424 of 2025 Page 56 of 70
petitioner, the transactions of export on the date of bill
of lading and/or clearance of goods for exportation by
the proper officer on being satisfied attracted nil customs
duty as Fe content of iron ore fines calculated on the
basis of WMT in terms of Circular dated 17.02.2012
were below 58%. The Commissioner of Customs has
completely discarded to apply the method or manner
specified in the Circular and the Letter dated 11.09.2023
of the Customs House Laboratory.
8.15. Though the Circular No.04/2012-Customs, dated
17.02.2012 issued by the CBIC is binding on the
authority concerned, he felt that the same is not
applicable to the present set of factual scenario. It is
revealed from the Order-in-Original that:
―4.33.7. From the foregoing discussions above, I hold
that the issue of DMT vs. WMT is not applicable in
the instant case, as I have observed that the
exporter has procured the majority of Iron Ore Fines
with Fe content exceeding 58%, as indicated in Form
but declared the same as below 58% in the Shipping
Bills at the time of export. Further, the exporter’s
argument – that Iron Ore Fines (IOF) should be
assessed based on Circular No.04/2012-Customs
dated 17.02.2012 is not sustainable in this case,
because it is evident from the statutory E-form that
the exporter purchased IOFs with Fe content of morechargeability, question of quantification of duty comes in. Classification
decides the applicable rate. It is followed by valuation i.e. value on which
the rate is to be applied. The concept of ‗classification’ is, therefore,
different from the concept of ‗valuation’.‖
W.P.(C) No.32424 of 2025 Page 57 of 70
than 58% in WMT, but declared the same as less
than 58% in the shipping bills. This is a clear
instance of fraud and deliberate misrepresentation,
where the exporter knowingly submitted
false/fabricated documents to Customs, colluded
with third parties, and established an intricate
network to conceal the true nature of its transactions
with the intent to evade approximately Rs.731.50
crore in legitimate customs duties. The evidence
relied upon in the SCN dated 18.12.2023 proves that
the exporter submitted false declarations to
Customs, establishing a ―knowing‖ intent. The fraud
involved forging government permits (FORM-I),
colluding with testing laboratories to obtain
manipulated quality certificates, and using dummy
companies in Hong Kong and Singapore to create a
façade of legitimacy while hiding the true nature and
value of the goods from Customs authorities. Based
on comprehensive evidence of fraud, the exporter is
liable for the differential duty demanded and
penalties under the Customs Act, 1962, for
misdeclaration, suppression of facts, and collusion
making the subject goods liable for confiscation
under Section 113(1) of the Customs Act, and the
Noticees are liable for penalties, under Sections 114
and 114AA for wilful misstatement, document
falsification, and duty evasion.‖8.16. From the above finding of fact it appears that the
evidence on record has been analysed with respect to
fraud/collusion/misdeclaration etc. by the
Commissioner of Customs (Preventive); nevertheless, it isW.P.(C) No.32424 of 2025 Page 58 of 70
apparent that the method of assessment has not been
made on the basis of WMT.
8.17. At this stage, it may be relevant to have reference to
BSNL Vrs. Union of India, (2006) 3 SCC 1 wherein it has
been laid down that:
―19. To a similar effect is Junior Telecom Officers Forum
Vrs. Union of India, 1993 Supp (4) SCC 693 where
the appellants had intervened in the earlier
proceedings. After the controversy was decided in
those proceedings the appellants sought to reagitate
the same issues in respect of the same matter
contending that they had no opportunity of being
heard. The submission was rejected and it was held
that the second round was impermissible.
20. The decisions cited have uniformly held that res
judicata does not apply in matters pertaining to tax
for different assessment years because res judicata
applies to debar courts from entertaining issues on
the same cause of action whereas the cause of
action for each assessment year is distinct. The
courts will generally adopt an earlier pronouncement
of the law or a conclusion of fact unless there is a
new ground urged or a material change in the
factual position. The reason why the courts have
held parties to the opinion expressed in a decision in
one assessment year to the same opinion in a
subsequent year is not because of any principle of
res judicata but because of the theory of precedent
or the precedential value of the earlier
pronouncement. Where facts and law in a
subsequent assessment year are the same, noW.P.(C) No.32424 of 2025 Page 59 of 70
authority whether quasi-judicial or judicial can
generally be permitted to take a different view.
This mandate is subject only to the usual gateways
of distinguishing the earlier decision or where the
earlier decision is per incuriam. However, these are
fetters only on a coordinate Bench which, failing the
possibility of availing of either of these gateways,
may yet differ with the view expressed and refer the
matter to a Bench of superior strength or in some
cases to a Bench of superior jurisdiction.‖
8.18. Regard may be had to following enunciation of principle
by the Hon’ble Supreme Court of India in Siddachalam
Exports Private Ltd. Vrs. Commissioner of Central Excise,
Delhi-III, (2011) 4 SCR 695:
―14. It is trite law that the amplitude of an appeal under
Section 130E(b) of the Act, in relation to the rate of
duty of customs or to the value of goods for the
purposes of assessment, is very wide but it is
equally well settled that where the CESTAT, a
fact finding authority, has arrived at a finding
by taking into consideration all material and
relevant facts and has applied correct legal
principles, this Court would be loathe to
interfere with such a finding even when
another view might be possible on same set of
facts. Nevertheless, if it is shown that the
conclusion under challenge is such as could not
possibly have been arrived·at by a person duly
instructed upon the material before him, i.e.,
conclusion is perverse or that the CESTAT has failed
to apply correct principles of law, this Court isW.P.(C) No.32424 of 2025 Page 60 of 70
competent to substitute its own opinion for that of
the CESTAT.
15. Having bestowed our anxious consideration to the
facts at hand, we are constrained to observe that the
decisions of both the authorities below are
unsustainable. In our opinion, neither the
Commissioner nor the CESTAT has examined the
issue before them in its correct perspective and as
per the procedure contemplated in law for
determination of the value of the goods for
exportation.
16. It is settled that the procedure prescribed under
Section 14( 1) of the Act and particularized in Rule 4
of the 1988 Rules has to be adopted to determine
the value of goods entered for exports, irrespective of
the fact whether any duty is leviable or not. It is also
trite that ordinarily, the price received by the
exporter in the ordinary course of business shall be
taken to be the transaction value for determination
of value of goods under export, in absence of any
special circumstances indicated under Section 14(1)
of the Act and Rule 4(2) of the 1988 Rules. The initial
burden to establish that the value mentioned by the
exporter in the bill of export or the shipping bill, as
the case may be, is incorrect lies on the Revenue.
Therefore, once the transaction value under Rule 4 is
rejected, the value must be determined by
sequentially proceeding through Rules 5 to 8 of the
1988 Rules. [See: Commissioner of Customs (Gen),
Mumbai Vrs. Abdulla Koyloth, (2010) 5 GSTR 571
(SC).]
17. In Om Prakash Bhatia Vrs. Commissioner of
Customs, Delhi, (2003) 6 SCC 161, while dealing
W.P.(C) No.32424 of 2025 Page 61 of 70
with a similar case of fraudulent drawback claim by
deliberately over-invoicing ready-made garments,
this Court rejected the plea of the exporter that
Section 113(d) of the Act was not applicable to the
facts of that case as the goods were not prohibited
goods; (ii) the exporter was required to declare the
value of the goods expected to be received from the
overseas purchaser and not the market value of
such goods in India and (iii) since in that case, no
duty was payable on the export, Section 14 of the
Act could not be applied to determine the value of
the goods. It was, inter-alia, held that the definition
of ‗prohibited goods’ in Section 2(33) of the Act
indicates that if the conditions prescribed for import
or export of the goods are not complied with, it would
be considered to be ‗prohibited goods’. It was held
that for determining the export value of the goods, it
is necessary to refer to the meaning of the word
‗value’ as defined in Section 2(41) of the Act and the
same must be determined in accordance with the
provisions of sub-section (1) of Section 14 of the Act.
The Court observed thus:
‗*** For determining the export value of the goods,
we have to refer to the meaning of the word ‗value’
given in Section 2(41)6 of the Act, which specifically
provides that value in relation to any goods means
the value thereof determined in accordance with the
provisions of sub-section (1) of Section 14. Section 14
specifically provides that in case of assessing the
value for the purpose of export, value is to be
determined at the price at which such or like goods6 Section 2(41) of the Customs Act, defines the term “value” as:
―(41) ‗value’, in relation to any goods, means the value thereof determined in
accordance with the provisions of 1[sub-section (1) or sub-section (2) of
section 14;‖
W.P.(C) No.32424 of 2025 Page 62 of 70
are ordinarily sold or offered for sale at the place of
exportation in the course of international trade,
where the seller and the buyer have no interest in
the business of each other and the price is the sole
consideration for sale. No doubt, Section 14
would be applicable for determining the value
of the goods for the purpose of tariff or duty of
customs chargeable on the goods. In addition, by
reference it is to be resorted to and applied for
determining the export value of the goods as
provided under sub-section (41) of Section 2. This is
independent of any question of assessability of the
goods sought to be exported to duty. Hence, for
finding out whether the export value is truly stated
in the shipping bill, even if no duty is leviable, it can
be referred to for determining the true export value of
the goods sought to be exported.’
18. The opinion expressed in Om Prakash Bhatia (supra)
has been reiterated by this Court in Bibhishan Vs.
State of Maharashtra, (2007) 12 SCC 390. It has
been held that the definition of ‗prohibited goods’ in
the Act is a broad one and the said provision not
only brings within its sweep an import or export of
goods which is subject to any prohibition under the
Act, but also any of the law for the time being in
force.‖
8.19. Having found the Commissioner of Customs while
finalising the shipping bill did not apply correct method
to determine the Fe contents (classification of goods) so
as to apply the rate of duty on the value determined in
accordance with the statutory provisions with reference
to date of occurrence of the taxable event qua export, the
W.P.(C) No.32424 of 2025 Page 63 of 70
Order-in-Original cannot be countenanced in law; and
hence, the same deserves to be set aside. While
observing that the Commissioner of Customs
(Preventive), Bhubaneswar ought to have applied WMT
instead of DMT method in order to arrive at the weight of
iron ore fines (Fe content), it is desirable that the said
authority should re-do the adjudication.
Conclusion:
9. Having thus analysed the material placed before this
Court and upon diligent consideration, it can be said
that since the transactions of export relate to prior to
enforcement of amendment in the Customs Tariff Act,
1975 by virtue of the Finance Act, 2022, the method of
calculation would be governed by the extant statutory
provisions, rules framed thereunder and circular(s) on
the date of taxable event.
9.1. It is relevant to take note of the observation contained in
paragraph 4.4.1 of the Order-in-Original that the SCN
was issued based on certificates from China’s Entry-Exit
Inspection and Quarantine (CIQ) indicating Fe content of
received goods at their end was “more than 58% in some
cases where M/s. SMNPL had declared it below 57%”
and as against certification of TCRC-Singapore
(subsidiary of TCRC-India) depicted Fe content being
more than 60%; whereas TCRC, India reported FeW.P.(C) No.32424 of 2025 Page 64 of 70
content at below 58%. The petitioner disputes, which
remained unanswered by the opposite parties, that it is
unknown whether TCRC, Singapore has certified on
DMT basis or WMT basis. Therefore, it is submitted that
the certificate issued by the TCRC-India ought to be
accepted and followed.
9.2. This Court is not brought to notice by the learned Senior
Standing Counsel with respect to consideration of time-
lag between the certificates on the basis of samples of
goods. As is apparent from the record, TCRC, India
certified percentage of Fe content in close proximity of
“Entry of goods for exportation” [Section 50] and
“Clearance of goods for exportation” [Section 51].
Referring to Chapter Heading 2601 11, 2601 12 and
Tariff Items under 2601 read with Notification
No.15/2016-Customs, dated 01.03.2016 it is submitted
by the petitioner (written note of submission dated
11.12.2025) that tariff items covering iron ore/iron ore
fines with Fe content less than 58% are exempt from
levy of customs duty; whereas iron ore fines with Fe
content of 58% or more being covered by Tariff Item
Nos.2601 11 43 and 2601 11 49 would attract levy of
duty at 30%. Reading paragraph 4.10 of the Order-in-
Original percolates no ambiguity in mind that the
petitioner had not disclosed entire stock of iron ore fines
exported at below 58%. It is revealed from the finding ofW.P.(C) No.32424 of 2025 Page 65 of 70
the authority concerned that the petitioner has paid
customs duty by applying the rate on the goods exported
having Fe content more than 58%. In the written note of
submission dated 11.12.2025 it has been highlighted by
the counsel for the petitioner that although in one of the
statements of co-petitioner a specific reference was made
to CRCL report, which was also made known to the
Adjudicating Authority by way of reply to SCN, sphinx
silence is maintained in this regard while passing Order-
in-Original. No answer is available with the learned
Senior Standing Counsel as against the statement made
by the petitioner through its counsel that “impugned
Order vide Paragraphs 2.2.9 and 3.2.6 (at pages 635 and
637 of the writ petition) records that the co-petitioner
duly requested for consideration of CRCL reports.
Despite this, the impugned Order is completely silent on
the CRCL reports”.
9.3. Reference to following observations made in Reliance
Cellulose Products Ltd. Vrs. CCE, (1997) 6 SCC 464 may
be apposite to be taken note of in this context:
―12. These orders are not under challenge before this
Court. We were referred to a number of test reports
obtained by the appellant from various persons and
on the basis of these opinions, the reports of the
Departmental Chemical Examiner and also the Chief
Chemist were assailed. We are of the view that the
Assistant Collector cannot be said to have erred inW.P.(C) No.32424 of 2025 Page 66 of 70
relying upon the reports given by the Chemical
Examiner and the Chief Chemist. It may be that in a
given case, the report of the Chief Chemist may be
demonstrated to be palpably wrong. In such a case,
the Court may direct re-examination of the whole
issue. But that is not the case here. It has not been
shown that the Chemical Examiner or the Chief
Chemist were in error in their analysis in any way.
The views expressed by the Chief Examiner and
Chief Chemist of the Government cannot be lightly
brushed aside on the basis of opinion of some
private persons obtained by the appellant.
13. Under Rule 56 of the Central Excise Rules, the
Central Excise Officer is empowered to take samples
for the purpose of testing the samples. He has to
communicate the result of such tests to the
manufacturer. If the manufacturer is aggrieved by
the result of the test, he can request the Assistant
Collector that the samples be re-tested. That
procedure has been followed. Therefore, there is no
procedural infirmity in the order of the Assistant
Collector nor has it been established that the
Assistant Collector was wrong in relying on the
report of the Chemical Examiner and Chief Chemist
in preference to the opinion obtained by RCPL from
some private individuals.‖9.4. Suffice it to say that the factual controversy can be
resolved by the statutory authority by quantifying the
iron ore fines having below 58% Fe content and more
than 58% Fe content and computing on the WMT basis.
This Court with respect to acceptance of certification of
accredited companies on the basis of WMT has
W.P.(C) No.32424 of 2025 Page 67 of 70
elaborately discussed in Commissioner of Customs
(Preventive) Vrs. Essel Mining and Industries Ltd., 2026
SCC OnLine Ori 145. It may be pertinent to accede to the
submission of the petitioner that Form E mandates the
recording of mineral quantities in WMT on natural
basis/as received basis/WMT, primarily for
standardization, accurate revenue calculation and
effective enforcement. It is submitted by the petitioner
that such disclosure in Form E is made excluding the
moisture content.
9.5. Though many grounds have been taken by way of
pleadings in the writ petition to attack the Order-in-
Original, during the course of hearing, the arguments
were confined to adjudication of whether the calculation
of Fe content of the exported iron ore fines would be on
the basis of DMT or WMT, for the transactions of export
effected were prior to enforcement of amendment in the
Customs Tariff Act, 1975 by virtue of the Finance Act,
2022, which is posed in the written note of submission
dated 09.03.2026.
9.6. This Court on going through the Order-in-Original also
finds that the replies to the SCN of the petitioner have
not been dealt with in proper perspective.
9.7. Therefore, this Court having analysed entire gamut of
factual position as obtained in record and upon hearing
W.P.(C) No.32424 of 2025 Page 68 of 70
the counsel appearing for both the sides on the subject
comes to conclusion that the Commissioner of Customs
(Preventive), Bhubaneswar has proceeded to adjudicate
the Fe content to be more than 58% on the basis of
DMT, which in the considered opinion is erroneous
approach and such finding rendered in the Order-in-
Original is perverse and inconsistent and conflicts with
the settled position of law in this regard.
10. As the petitioner has confined its challenge to question
the method of determination of weight of iron ore fines
for the purpose of considering whether duty would be
nil, this Court does not have scope to go into the merit of
the matter by analysing each shipping bill which is
domain of the Adjudicating Authority. Furthermore, with
respect to the allegation of fraud, the same is to be
factually decided on proper evidence, confrontation and
by affording opportunity.
10.1. It is found that the Commissioner of Customs
(Preventive), Bhubaneswar erred in not determining the
percentage of Fe content in the iron ore fines exported
out of the country on WMT basis. For the reasons
assigned and discussion made, the Order-in-Original
dated 24.09.2025 passed by the Commissioner of
Customs (Preventive), Bhubaneswar vide Annexure-11
warrants interference inasmuch as the said Order
W.P.(C) No.32424 of 2025 Page 69 of 70
cannot be sustained. Hence, the said Order is hereby set
aside.
10.2. As a consequence thereof, the matter is remitted to the
Commissioner, Customs (Preventive), Bhubaneswar to
adjudicate the liability or otherwise by classifying
appropriately the iron ore fines on the basis of WMT.
Said Authority is further directed to adhere to the
principles of natural justice by affording reasonable
opportunity of hearing and confronting the material
collected behind the back of the petitioner and wished to
be utilised in course of assessment.
10.3. The entire exercise of assessment is directed to be
completed not beyond four months from date.
11. In the result, the writ petition is allowed to the extent
indicated above, but in the circumstances with no order
as to costs. Pending Interlocutory Applications, if any,
shall stand disposed of accordingly.
I agree.
(HARISH TANDON) (MURAHARI SRI RAMAN)
CHIEF JUSTICE JUDGE
Signature Not
Verified
Digitally Signed
Signed by: ASWINI KUMAR
SETHY
Designation: Personal Assistant High Court of Orissa, Cuttack
(Secretary-in-charge)
Reason: Authentication The 27th April, 2026/Aswini/Bichi/Laxmikant
Location: ORISSA HIGH
COURT, CUTTACK
Date: 27-Apr-2026 15:49:09
W.P.(C) No.32424 of 2025 Page 70 of 70
