The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no export duty payable on Indian Refractory Mortar.
The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) has observed that the goods, Indian Refractory Mortar cannot be classified under CTH 2610, therefore, no export duty is payable by the respondent/assessee.
The respondents/assessee were involved in export of a product declared as “Indian Refractory Mortar” by classifying the same under CTH 38160000, on which no export duty is payable.
There was an intelligence by the Directorate of Revenue Intelligence, Bangalore Zonal Unit, Bangalore, which indicated that the product exported by the respondent and declared as “Indian Refractory Mortar” classified under CTH 38160000 was actually Chrome Ore Concentrate, which should correctly and legitimately be classified under CTH 2610, which attract export duty @ 30% in terms of Schedule II of the Customs Tariff Act, 1975. In addition, it was also appeared that such a mechanism was devised by the respondents in terms of Export Policy.
As per the Directorate General of Foreign Trade (DGFT)’s Export Policy-ITC (HS) 2018, the export of Chromium Ore & Concentrate of various grades as classified as “restricted” by the Export Policy in terms of the General Notes to Export Policy-Schedule 2-Export Policy- restricted item can be permitted for export under license.
The procedures/conditionalities wherever specified against the restricted items may be required to be complied with, in addition to the general requirement of license in all cases of restricted items.
On the basis of the said Intelligence, DRI initiated an investigation and conducted search operations on 10.09.2020 and 11.09.2020 at the premises of the respondents and the statements were also recorded. Certain documents were also recovered. Email addresses were also taken into consideration and on the basis of that, it was alleged that the respondents were actually exported “Chrome Ore Concentrate” under the name and guise of “Indian Refractory Mortar” and has deliberately and willfully mis-classified under CTH 38160000 instead of correct CTH 2610.
Therefore, the show-cause notice was issued to the respondents. The respondents contested the show-cause notice and after considering the submissions made by the respondents, the adjudicating authority held that the goods exported by the respondents is “Indian Refractory Mortar”, which is classified under CTH 38160000 and the exported goods are not “Chrome Ore Concentrate” under CTH- 2610.
Therefore, no export duty is payable. Consequently, no interest is payable. MEIS benefit under Foreign Trade Policy 2015-2020 is allowed and no export duty against MEIS at the time of import is to be held liable for confiscation under Section 28AA of the Customs Act, 1962. The seized goods are ordered to be released and the penalty of Rs.10,00,000 on Shri Amandeep Singh Bal, Director M/s Falcon Exports, under Section 114AA of the Customs Act, 1962.
The main allegation is that the respondents are exporting “Chrome Ore Concentrate” which is classified under CTH 2610 in the guise of “Indian Refractory Mortar” by classifying the same under 3816.
The tribunal held that the exported product is not actually used in the metallurgical industry for the extraction of the metals of Section XV (chapter 81 covering chromium). It is going to M/s ITACA Spain which produces frits, glazes, pigments, inks and ceramic additives. The process of mixing chromite with magnesite and bentonite is not normal to metallurgical industry. So, it is evident the exported product is not falling under heading 2610 as per chapter note 2 of chapter 26 read with HSN explanatory notes.
Case Details
Case Title: Commissioner of Customs (Port), Kolkata Versus M/s Alliance International
Case No.: Customs Appeal No.75404 of 2024
Date: 24/02/2025
Counsel For Appellant: Subrata Debnath
Counsel For Respondent: Sudhir Malhotra
Read More: Tribunal Not Competent To Alter Show Cause Notice: CESTAT
