(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Appellant, a ship-breaker, has challenged the judgment of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT for short) dated 10th March 2004, by virtue of which the Tribunal allowed the Revenue's appeal and set aside the order passed by the Appellate Commissioner.
2. The appellant had purchased a ship MV Samrat Ashok from the Shipping Corporation of India through a public auction for a sum of Rs.11,63,00,000/-. The ship was purchased for breaking. The vessel was handed over to the appellant at Sikka where it was beached and from Sikka Port, the appellant brought the ship to Alang Ship Breaking Yard. In terms of the provisions of Customs Valuation Rules, 1988, the adjudicating authority initially determined the assessable value of the ship for the purpose of collection of customs duty. Such determination was in absence of details of cost of freight and insurance incurred for shifting the ship from Sikka to Alang Shipyard. On the basis of such determination, the adjudicating authority demanded customs duty of Rs.4,18,07,805/-. Subsequently, when the present appellant furnished the details of freight, insurance and other charges, the assessment was modified and the duty demand was revised to Rs.3,47,29,228/-.
3. Against such assessment and duty demand, the appellant preferred appeal before the Commissioner and sought refund of what according to the appellant was excess duty of Rs.8,99,884/-. The Commissioner, Appeals allowed the said appeal relying on the earlier decision of CESTAT in case of the very assessee. The Revenue carried the matter in appeal before the CESTAT challenging the order of the Appellate Commissioner. Such appeal was allowed by the judgment dated 10.3.2004. The Tribunal made the following observations :
“We find substance in the claim of the department that cost of transport upto the place of importation (i.e. Alang), handling charges and cost of insurance are required to be included in the transaction value in terms of Rule 9 of the Valuation Rules. We also agree with the Revenue that the Tribunal's order relied upon by the Commissioner (Appeals) is not applicable to the facts of the present case, as the question of inclusion of freight and insurance charges was not the subject matter for decision in the earlier case. Since the vessel was “imported at Alang” as the bill of entry for its final clearance was filed there, and not at Sikka, cost of transport and insurance from Sikka to Aland is required to be included in the transaction value. As a result, we set aside the impugned order and allow the appeal.”
It is this judgment of the Tribunal which the importer has challenged in this appeal. At the time of admission of the appeal, following substantial question of law was framed :
“Whether, on the facts and in the circumstances of the case, the Customs, Excise & Service Tax Appellate Tribunal was justified in law in invoking Rule 9 of the Customs Valuation Rules, 1988 or whether Rule 7 of the said Rules would apply so as to exclude Rule 9 of the Rules ?”
4. When this appeal was taken up for final hearing, learned Senior Counsel Shri RJ Oza for the Department raised a preliminary objection contending that in view of the provisions contained in section 130E of the Customs Act, 1962, such appeal would be maintainable only before the Supreme Court and in that view of the matter, by virtue of the provisions contained in section 130 of the Act, this Court would have no jurisdiction to entertain such an appeal. In support of his contention, the counsel relied on the decision of the Apex Court in the case of Union of India v. Guwahati Carbon Ltd., 2012 (278) E.L.T. 26 (SC) and on the decision of a Division Bench of the Karnataka High Court in the case of Commissioner of Customs Bangalore, v. Motorola India Ltd., 2012 (275) E.L.T. 53 (Kar.).
5. On the other hand, learned counsel Ms.Jani for the appellant opposed such preliminary objection contending that the appeal was admitted in the year 2005. Such a contention at this stage should not be allowed to be raised. She further submitted that the issue involved is whether the charges incurred by the importer for shifting the ship from Sikka to Aland Ship Breaking Yard should be included in the assessable value of the ship for the purpose of collection of customs duty. She submitted that the appeal would, therefore, be maintainable before this Court. In this context, she relied on the decision of the Apex Court in the case of Navin Chemicals Mfg. And Trading Co. Ltd. v. Collector of Customs, (1993) 4 SCC 320.
6. As is well known, section 130E of the Customs Act provides for an appeal to the Supreme Court in certain cases including against an order passed by the Appellate Tribunal 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 the goods for the purpose of assessment. Correspondingly, under section 130 of the Customs Act, which pertains to appeals to the High Court, the High Court's jurisdiction to entertain any appeal against the order of the Appellate Tribunal is ousted when such order is one relating, among other things, to the determination of any question having any relation to the rate of duty of customs or to the value of goods for the purpose of assessment.
7. In the present case, admittedly, the question of assessable value of the goods is at issue, on the basis of which customs duty would be collected. The very question which was framed by the High Court brings out such a controversy. In that view of the matter, the decision of the Apex Court in the case of Guwahati Carbon Ltd. (supra) would squarely apply. In the said decision, it was observed as under:
“17. Having said so, we have gone through the orders passed by the Tribunal. The only determination made by the Tribunal is with regard to the assessable value of the commodity in question by excluding the freight/transportation charges and the insurance charges from the assessable value of the commodity in question. Since what was done by the Tribunal is the determination of the assessable value of the commodity in question for the purpose of the levy of duty under the Act, in our opinion, the assessee ought to have carried the matter by way of an appeal before this Court under section 35L of the Central Excise Act, 1944.”
We also notice that a Division Bench of the Karnataka High Court in the case of Motorola India Ltd. (supra) opined that out of the several categories of disputes which do not fall within the jurisdiction of the High Court under section 130 of the Customs Act, one of them was whether the value of goods for the purpose of assessment is required to be increased or decreased.
8. The decision of the Supreme Court in the case of Navin Chemicals Mfg. And Trading Co. Ltd. (supra) on which the counsel for the appellant relied on also, in our view, does not lay down any different proposition. It was a case where the Supreme Court was considering whether certain appeal should have been heard by the ordinary Bench of the CEGAT or by a Special Bench. In that context, the Supreme Court had the occasion to interpret the expression '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'. The Supreme Court observed as under:
“Questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for purposes of assessment. Whether the value of goods for purposes of assessment is required to be increased or decreased is a question that relates directly and proximately to the value of goods for purposes of assessment. The statutory definition of the said expression indicates that it has to be read to limit its application to cases where, for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of the goods.”
Even applying such test, the present case would be covered under the exclusion clause of section 130 of the Customs Act and hence the appeal before the High Court would not be competent.
9. This being a question of maintainability of the appeal, simply because such an appeal was admitted would not authorize to hear the same on merits as well. We may also record that the appeal was admitted ex parte without hearing the respondent. Obviously, the respondent, therefore had no opportunity to raise the contention regarding maintainability of the appeal. In any case, the question of maintainability was never examined or gone into by this Court while admitting the appeal.
10. Under the circumstances, the appeal is dismissed only on the ground of maintainability without entering into the merits of the appeal.
(Akil Kureshi, J.) (vjn) (Harsha Devani, J.)