By TIOL News Service

CHENNAI, SEPT 27, 2017: AN order was passed by the Commissioner of Customs concluding that EL-S-PR Railway Coach- TC (Coach) imported by the petitioner is to be reclassified as "Not Self-Propelled"- passenger coaches, under CTH 8605 of the CTA, 1975 andthe customs duty of Rs.9,17,89,622/- is payable along with equivalent penalty; goods (released provisionally) are confiscated but allowed to be redeemed on payment of redemption fine of Rs.5 crores etc. The petitioner had allegedly mis-declared the same as self-propelled coaches falling under CTH 8603 1000 and claimed the benefit of exemption notification No.152/2009-CUS dated 31.12.2009.

The Writ Petitions have been filed challenging the impugned order as being passed in violation of principles of natural justice; that the first respondent is bound by the International legal obligations entered into by the Government of India with the Government of Korea; that the Commissioner ignored the written opinion on HS classification by Korean Customs Classification Institute; that the impugned order is bad for want of jurisdiction, as the Directorate of Revenue Intelligence (lacked jurisdiction) to issue show cause notice, consequently, the impugned order is also vitiated for lack of jurisdiction etc.

The Counsel for the Revenue inter alia submitted that without filing an appeal before the CESTAT under Section 129A of the Act, the petitioners have filed the present Writ Petitions, which are not maintainable; that the issue involves classification of goods and theHigh Court even in exercise of its appellate jurisdiction under Section 130 of the Customs Act, shall not entertain the appeal in view of specific exclusion. Reliance is placed on the decisions in Shri Consultants Pvt., Ltd. - 2015-TIOL-2488-CESTAT-DEL; United Bleachers Ltd. - 2011-TIOL-253-HC-MAD-CX and M/s.T.T.Krishnamachari & Co. - 2014-TIOL-2024-HC-MAD-ST.

After considering the extensive submissions made, the High Court observed –

++ Under Section 130(1) of the Customs Act, an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after 01.07.2003, not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment. Thus, even in exercise of the appellate jurisdiction, the Division Bench of this Court should be satisfied that the case involves a substantial question of law when an appeal is filed against an order passed by the appellate Tribunal, CESTAT. The jurisdiction of the Court is excluded when such an order of CESTAT relates to determination of the rate of duty of customs or the value of the goods for the purposes of the assessment.

++ The moot question would be if the appellate jurisdiction of this Court has been specifically excluded, when it pertains to determination of the value or regarding the classification of the goods, whether this Court exercising jurisdiction under Article 226 of the Constitution would be justified in testing the correctness of the impugned order.

++ The Division Bench ( in the case of Commissioner of Customs (Exports), Chennai vs. D.S.Metal (P) Ltd.) while considering as to whether appeal was maintainable on such an issue referred to the decision of the Hon'ble Supreme Court in the case of Navin Chemicals Manufacturing and Trading Co., Ltd., vs. Collector of Customs, = 2002-TIOL-460-SC-CUS and held that the issue which arises for consideration is what will be the rate of duty that is payable by the importer, but for the notification in question and by applying the law in the case of Navin Chemicals Manufacturing and Trading Co., Ltd ., (supra), and taking note of Section 130 of the Customs Act, it was held that the appeal is not maintainable, as the question has a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. [United Bleachers Ltd., vs. CEGAT Chennai (supra) also relied upon.]

++ The only conclusion that can be arrived at is to hold that the Writ Petition is not maintainable and the petitioner has to avail the remedy provided under the Act. This is sufficient to dismiss the Writ Petitions and relegate the petitioners to appellate remedy provided under Section 129A(1) of the Customs Act.

The Writ Petitions were held to be not maintainable and dismissed.

Nonetheless, the High Court clarified that in the event an appeal is presented before the Tribunal, the CESTAT shall exclude the period during which these Writ Petitions were pending i.e., from 14.12.2015, till the date of receipt of certified copy of this order while computing limitation.

(See 2017-TIOL-2031-HC-MAD-CUS)