CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL HYDERABAD REGIONAL BENCH - COURT NO. – I Customs Appeal No. 26953 of 2013 (Arising out of Order-in-Original No.06/2013 - VCH dated 03.04.2013 passed by Commissioner of Customs, Central Excise & Service Tax (Appeals), Visakhapatnam)

Commissioner of Customs .. APPELLANT Visakhapatnam - Customs Custom House, Port Area, Visakhapatnam, Andhra Pradesh – 530 035.

VERSUS M/s Kothari Products Ltd., .. RESPONDENT C/62, Vibgyor Tower, 9^th Floor, Bandra Kurla Complex, Bandra (East), Mumbai, Maharashtra – 400 051.

APPEARANCE:

Shri M. Anukathir Surya, Authorized Representative for the Appellant.

None for the Respondent.

CORAM: HON’BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL)

HON’BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL)

FINAL ORDER No. _A/30130/2026__

Date of Hearing: 25.02.2026 Date of Decision: 25.02.2026 [ORDER PER: ANGAD PRASAD]

The Department (hereinafter referred to as appellant) are in appeal against the order of the Commissioner (Appeals) dated 03.04.2013, whereby, he had modified the Order-in-Original dated 28.12.2012.

2. The brief fact of the case is that the respondent M/s Kothari Products Ltd., had filed Shipping Bill dated 19.02.2010 for export of 30100 WMTs of iron ore fines of 63% Fe content as per contract no. CSC-005/010 dated 29.01.2010. The declared unit price was 122 PDMT CF. The respondent also declared freight as USD 39 PDMT and submitted a fixture note. The assessment was kept provisional as a subsequent the respondent furnished document including Bank Realization Certificate (BRC) for finalization of provisional assessment where the unit value was brought to USD 102 PDMT FOB. The Adjudicating Authority also considered a part of the iron ore fine as lumps which was in excess of the tolerance limit of 5%, attracting higher rate of duty. This resulted in higher rate of duty of 1.77% of iron ore fine treated as lumps. The Adjudicating Authority also confirmed the export duty considering the value realized in BRC. On appeal, Commissioner (Appeals) modified this order to the extent that the moisture content as determined by SGS i.e. 4.79% is to be taken into account, whereas, Department had taken 3% moisture content for determining total duty. In so far as lumps were concerned there was no dispute between Department and the exporter.

3. The Department has come in appeal primarily on three grounds which are as follows:

i) Valuation: that the lower adjudicating authority has loaded the value to US$ 102 FOB (per Dry MT) on the basis of actual export by M/s PEC Ltd., of 63% Fe content whereas in the subject consignment the Fe content as per Customs House testing was 62% only. Hench, loading of value should have been resorted to on the basis of shipments where Fe content is in the neighbourhood of 62%. The Commissioner (Appeals) has also held that since the department did not make available the copies of shipping bill, invoice of the contemporary prices to the party, the department is on weak footing and loading is illegal as sufficient effort have not been made to justify loading of value.

ii) Moisture: That the basis of 3% moisture content is again unilateral and basis has not been revealed by the department. Hence, the Commissioner (Appeals) has ordered to accept the moisture as 4.79% as per the SGS report.

iii) Lumps: That the duty on lumps appeared to have been charged twice in as much as first on entire quantity rate of duty of fines has been applied and then on lumps part separately higher rate of duty has been applied. The Commissioner (Appeals) has held that lumps have suffered duty twice which is illegal.

4. Learned AR reiterates the grounds taken by the Department and highlights the fact that some issues like lumps, moisture were not even raised by the respondent to consider and certain observations made by the Commissioner (Appeals). Their only observation is that Commissioner has indicated that Department had considered 3% moisture content whereas he accepted 4.79% and the same was co