Orissa High Court
Commissioner Of Customs vs M/S. Chamong Tee Exports Pvt. Ltd on 31 July, 2025
IN THE HIGH COURT OF ORISSA AT CUTTACK
OTAPL No. 42 of 2025
&
OTAPL No. 31 of 2025
In OTAPL No. 42 of 2025
Commissioner of Customs .... Appellant
(Preventive), Bhubaneswar
-Versus-
M/s. Chamong Tee Exports Pvt. Ltd .... Respondent
Advocates appeared in this case:
For Appellant : Mr. Tushar Kanti Satapathy,
Senior Standing Counsel
For Respondent : Mr. Abhratosh Majumdar,
Senior Advocate,
Mr. Rahul Khatian, Advocate &
Mr. Raj Kumar Jena, Advocate
In OTAPL No. 31 of 2025
Commissioner of Customs .... Appellant
(Preventive), Bhubaneswar
-Versus-
M/s. Chamong Tee Exports Pvt. Ltd .... Respondent
Advocates appeared in this case:
For Appellant : Mr. Tushar Kanti Satapathy,
Senior Standing Counsel
For Respondent : Mr. Abhratosh Majumdar,
Senior Advocate,
Mr. Rahul Khatian, Advocate &
Mr. Raj Kumar Jena, Advocate
OTAPL Nos. 42 & 31 of 2025 Page 1 of 15
CORAM:
HON' BLE THE CHIEF JUSTICE
AND
HON'BLE MR. JUSTICE MANASH RANJAN PATHAK
JUDGMENT
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Date of hearing and Judgment: 31st July, 2025
----------------------------------------------------------------------------------
HARISH TANDON, CJ.
1. The appellant has filed an appeal under Section 130 of the
Customs Act, 1962 assailing the judgment and order dated 30th
August 2024 passed by the Customs, Excise and Services Tax
Appellate Tribunal, Eastern Zonal Bench, Kolkata whereby and
whereunder, the demand raised by the appellant upon issuing the
show cause notices alleging that there has been a conscious
avoidance of the customs duty by splitting one consignment into
different components, was rejected.
2. The counsel for the appellant advanced his argument
raising an issue which according to him involves a substantial
question of law.
3. In order to ascertain whether the points so urged comes
within the periphery of the "substantial question of law", the
genesis of the dispute is required to adumbrated as discerned from
the records.
4. The respondent herein exported the iron ore fines (IOF)
under the cover of 13 shipping bills to different overseas buyers
depicting the value and quantity of the said iron ore fines. The
revenue authorities, on the basis of DRI investigation found that 5
consignments of high grade iron ore fines containing more than
58% of the iron (Fe) by splitting them into 7 shipping bills of high
grade iron ores which attracts the customs duty @ 30% and
discharged their obligations upon payment of the same, but 6
shipping bills of iron ore fines which contain less than 58% of Fe
being exempted from the customs duty under law, no duty was
paid and, therefore, they have undervalued such 5 consignments
with an intend to evade the custom duty.
5. 2 show cause notices were issued demanding the
differential custom duty on the basis of a test report of the
independent testing agency inviting the respondent to file the reply
thereto. The respondent took a defence that the said demand in
unsustainable as the Fe content is required to be determined on the
basis of Wet Metric Ton (WMT) and not on the basis of Dry
Metric Ton (DMT). It was the specific stand of the respondent that
it has been held by several High Courts that Fe content has to be
evaluated on the basis of WMT and not DMT and, therefore, the
stand of the revenue authority is not sustainable.
6. The adjudicating authority dropped the demand of the
revenue with categorical finding that the Fe content of the
aggregate/consolidated consignment exported through a single
vessel was less than 58% on WMT basis, but imposed certain
penalties on the respondent company and its authorised person.
Since the demand of differential amount of custom duty was
rejected by the adjudicating authority, the department preferred an
appeal before the Tribunal, wherein the respondent also filed the
cross objection challenging imposition of the penalty.
7. A stand was taken by the appellant in the appeal filed
before the Tribunal that the respondent intentionally split 5
consignments of high grade iron ore fines containing more than
58% Fe into several shipping bills, some of which contains more
than 58% Fe, where the custom duty @ 30% was discharged, but
did not pay the custom duty by undervaluing the consignment on
the premise that it contains less than 58% of Fe, which does not
attract the custom duty in law. A further plea was taken by the
appellant that the Fe content is to ascertained on the basis of DMT
and not WMT and the test report would reveal that IOF contains
more than 58% of Fe in aggregate which was rejected by the
Tribunal with categorical finding that the Fe content is to be
ascertained on the basis of WMT and not on the basis of DMT.
8. The challenge is made in the instant appeal reiterating the
stand that the testing report reveals that the said consignment being
the subject matter of the dispute, contains more than 58% of Fe on
DMT basis and, therefore, the finding of the Tribunal that it has to
be done on WMT basis is unsustainable.
9. Before we proceed to delve into the aforesaid points, we
find it prudent to recapitulate the position of law in pursuit to
ascertain the substantial question of law involved in an appeal filed
before this Court. We are conscious that a mere question of law
may not necessarily be a substantial question of law, and,
therefore, it is ardent duty of the High Court to ascertain the same
and admit the appeal upon formulation thereof. The expression
"substantial question of law" has not been defined in the said act
nor in any other statute containing such expression. The prefix of
the words „substantial‟ before the expression "question of law"
must be of such character having bearing on a substance having
essential, real and nexus to the issues involved therein, in
contradiction with the technical, inconsequential issues or merely
on academic.
10. In pursuit of determining the question to come within the
ambit of substantial question of law, the point must be debatable or
there is possibility of taking a different decision or the opinion and
above all where the Court feels that the said point or the question
may invite the alternative views to be taken. The point which is
settled by a catena of decisions of the coordinate Bench or of a
higher Court cannot come within the folds of substantial question
of law. The proper test for determining whether the question of
law raised in a case can be regarded as a substantial question of
law is highlighted in a judgment of the apex Court in Santosh
Hazari v. Purushottam Tiwari (Dead) By LRs, reported in 2001
(3) SCC 179 in the following paragraphs:
"14. A point of law which admits of no two
opinions may be a proposition of law but cannot be
a substantial question of law. To be substantial, a
question of law must be debatable, not previously
settled by law of the land or a binding precedent,
and must have a material bearing on the decision of
the case, if answered either way, in so far as the
rights of the parties before it are concerned. To be a
question of law involving in the case there must be
first a foundation for it laid in the pleadings and the
question should emerge from the sustainable
findings of fact arrived at by court of facts and it
must be necessary to decide that question of law for
a just and proper decision of the case. An entirely
new point raised for the first time before the High
Court is not a question involved in the case unless it
goes to the root of the matter. It will, therefore,
depend on the facts and circumstance of each case
whether a question of law is a substantial one and
involved in the case, or not; the paramount overall
consideration being the need for striking a judicious
balance between the indispensable obligation to do
justice at all stages and impelling necessity of
avoiding prolongation in the life of any lis.
15. A perusal of the judgment of the trial Court
shows that it has extensively dealt with the oral and
documentary evidence adduced by the parties for
deciding the issues on which the parties went to
trial. It also found that in support of his plea of
adverse possession on the disputed land, the
defendant did not produce any documentary
evidence while the oral evidence adduced by the
defendant was conflicting in nature and hence
unworthy of reliance. The first appellate Court has,
in a very cryptic manner, reversed the finding on
question of possession and dispossession as alleged
by the plaintiff as also on the question of adverse
possession as pleaded by the defendant. The
appellate Court has jurisdiction to reverse or affirm
the findings of the trial Court. First appeal is a
valuable right of the parties and unless restricted by
law, the whole case is therein open for rehearing
both on questions of fact and law. The judgment of
the appellate Court must, therefore, reflect its
conscious application of mind, and record findings
supported by reasons, on all the issues arising along
with the contentions put forth, and pressed by the
parties for decision of the appellate Court. The task
of an appellate Court affirming the findings of the
trial Court is an easier one. The appellate Court
agreeing with the view of the trial Court need not
restate the effect of the evidence or reiterate the
reasons given by the trial Court; expression of
general agreement with reasons given by the Court,
decision of which is under appeal, would ordinarily
suffice (See Girijanandini Devi & Ors. Vs. Bijendra
Narain Choudhary, AIR 1967 SC 1124). We would,
however, like to sound a note of caution. Expression
of general agreement with the findings recorded in
the judgment under appeal should not be a device or
camouflage adopted by the appellate Court for
shirking the duty cast on it. While writing a
judgment of reversal the appellate Court must
remain conscious of two principles. Firstly, the
findings of fact based on conflicting evidence
arrived at by the trial Court must weigh with the
appellate Court, more so when the findings are
based on oral evidence recorded by the same
presiding Judge who authors the judgment. This
certainly does not mean that when an appeal lies on
facts, the appellate Court is not competent to
reverse a finding of fact arrived at by the trial
Judge. As a matter of law if the appraisal of the
evidence by the trial Court suffers from a material
irregularity or is based on inadmissible evidence or
on conjectures and surmises, the appellate Court is
entitled to interfere with the finding of fact (See
Madhusudan Das Vs. Smt. Narayani Bai & Ors.,
AIR 1983 SC 114). The rule is __ and it is nothing
more than a rule of practice __ that when there is
conflict of oral evidence of the parties on any matter
in issue and the decision hinges upon the credibility
of witnesses, then unless there is some special
feature about the evidence of a particular witness
which has escaped the trial Judges notice or there is
a sufficient balance of improbability to displace his
opinion as to where the credibility lies, the appellate
Court should not interfere with the finding of the
trial Judge on a question of fact.(See Sarju Pershad
Ramdeo Sahu Vs. Jwaleshwari Pratap Narain Singh
& Ors., AIR 1951 SC 120). Secondly, while
reversing a finding of fact the appellate Court must
come into close quarters with the reasoning
assigned by the trial Court and then assign its own
reasons for arriving at a different finding. This
would satisfy the Court hearing a further appeal
that the first appellate Court had discharged the
duty expected of it. We need only remind the first
appellate Courts of the additional obligation cast on
them by the scheme of the present Section 100
substituted in the Code. The first appellate Court
continues, as before, to be a final Court of facts;
pure findings of fact remain immune from challenge
before the High Court in second appeal. Now the
first appellate Court is also a final Court of law in
the sense that its decision on a question of law even
if erroneous may not be vulnerable before the High
Court in second appeal because the jurisdiction of
the High Court has now ceased to be available to
correct the errors of law or the erroneous findings
of the first appellate Court even on questions of law
unless such question of law be a substantial one."
11. Such being the proposition of law relating to the
involvement of a substantial question of law, the point urged
before us whether the Fe content in IOF is to be ascertained on the
basis of WMT or DMT involves a substantial question of law, our
attention was drawn to a coordinate Bench decision of this Court
in the case of Commissioner of Customs (Preventive),
Bhubaneswar v. Kai International Pvt. Ltd., reported in (2025) 29
Centax 178 (Ori). In the said judgment the identical issue was
raised whether Fe content in IOF has to be ascertained on the basis
of WMT or DMT and the coordinate Bench answered the same in
the following:
"12. We accept respondent's contentions upon
reliance on Dwijendra Narain Roy (supra). So far
as V.M. Salgaocar and Brother Pvt. Ltd. (supra) is
concerned, one of the views taken by the Division
Bench of the Bombay High Court says, it is not
correct for revenue to contend that the dry method
which is being used for the purpose of trade and
commerce be made applicable for purpose of
determination of its classifications for the purposes
of levy of export duty of raw iron ore in its natural
form. Disclosed in the appeal is circular dated 17th
February, 2012, paragraph-3 in which is
reproduced below.
"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 of moisture) out of the
total weight/Gross Weight to arrive at Net Fe
contents."
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 the 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 v. Joges Chandra
De, reported in AIR 1924 Calcutta 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 v. Chuni Lal (45);
Giris v. Bepin (46); Bama Charan v. Nimai Mandal
(47). 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. ... ..."
(emphasis supplied)
15. In view of the discussions made hereinabove, we do not
find that the instant appeals involve substantial question of law
under Section 130 of the Customs Act, 1962. The appeals are
dismissed. There shall be no orders as to costs.
(Harish Tandon)
Chief Justice
(M.R. Pathak)
Judge
Arun Mishra
Designation: ADR-cum-Addl. Principal Secretary
Location: High Court of Orissa, Cuttack
Date: 31-Jul-2025 19:34:58
