2016 (1) TMI 472 - HC - Customs

Maintainability of writ petition - alternative appellate remedy - Re-classifcation of Micom Px40 range of products (IEDs) as Automatic Regulating or Controlling Instruments and Apparatus - exemption of customs duty under Notification No.25/99-Cus. - Held that - Prima facie, the impugned order is appealable before the Commissioner of Central Excise (Appeals), Chennai. In view of the settled legal position that the availability of alternative remedy would be a clear bar for approaching this Court under Article 226 of the Constitution of India, this Court could see that only for the purpose of avoiding the pre-deposit of 7.5% of the duty demanded, the petitioner has filed the present writ petition on the ground that the issues are covered. But still the issues as to whether the respondent can demand differential customs duty under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 and whether the respondent has got jurisdiction to demand differential customs duty beyond one year from the date of show cause notice are to be decided only by the appellate authority, but not by this Court. The second contention raised by the petitioner that the impugned order is a non-speaking order is also not acceptable. In any event, this Court is not inclined to entertain the writ petition, as the petitioner has to challenge the impugned order only before the appellate Commissioner. Since the writ petition is filed before this Court within sixty days, the petitioner is permitted to approach the appellate authority within sixty days from the date of receipt of a copy of this order. - Decided against the appellant.

Summary

Issues:
1. Classification of products under Customs Chapter Sub Heading 90328910 and exemption of customs duty.
2. Demand of customs duty, interest, and penalty under the Customs Act.
3. Jurisdiction of the Assistant Commissioner to demand customs duty beyond one year from the date of show cause notice.
4. Appealability of the impugned order before the Commissioner of Central Excise (Appeals).
5. Validity of the writ petition challenging the impugned order under Article 226 of the Constitution of India.

Classification of products under Customs Chapter Sub Heading 90328910 and exemption of customs duty:
The judgment revolves around the reclassification of Micom Px40 range of products as "Automatic Regulating or Controlling Instruments and Apparatus" under Customs Chapter Sub Heading 90328910. The petitioner, engaged in manufacturing electrical equipment, imported parts for relay manufacturing under concessional duty rates. Despite explanations and clarifications by the petitioner, the respondent demanded customs duty of Rs. 21,99,45,177 and imposed interest and penalty under the Customs Act. The petitioner contended that the reclassification was incorrect and challenged the denial of exemption under Notification No.25/99-Cus. The issue of classification and exemption forms a significant part of the dispute in the judgment.

Demand of customs duty, interest, and penalty under the Customs Act:
The Assistant Commissioner confirmed the demand of customs duty, interest, and penalty under the Customs Act in the impugned order. The penalty was subject to reduction if paid within 30 days. The petitioner argued against the imposition of differential customs duty beyond one year from the show cause notice date. The judgment delves into the specifics of the duty demanded, interest charged, and penalty imposed, highlighting the financial implications on the petitioner.

Jurisdiction of the Assistant Commissioner to demand customs duty beyond one year from the date of show cause notice:
The petitioner contested the Assistant Commissioner's jurisdiction to demand differential customs duty beyond one year from the show cause notice date. The legal challenge focused on the authority's power to impose duties retrospectively, questioning the timeliness and validity of such demands. This issue underscores the procedural and jurisdictional aspects of customs duty enforcement.

Appealability of the impugned order before the Commissioner of Central Excise (Appeals):
The judgment clarifies that the impugned order is appealable before the Commissioner of Central Excise (Appeals) in Chennai. It emphasizes the principle of exhausting alternative remedies before seeking judicial intervention under Article 226 of the Constitution of India. The petitioner's attempt to challenge the order directly in court was deemed premature, highlighting the hierarchy of appellate recourse in tax matters.

Validity of the writ petition challenging the impugned order under Article 226 of the Constitution of India:
The court dismissed the writ petition challenging the impugned order under Article 226 of the Constitution of India. It emphasized the need to approach the appellate authority for redressal before seeking relief through writ jurisdiction. The judgment underscores the procedural correctness and jurisdictional boundaries of invoking constitutional remedies in tax disputes, guiding the petitioner to pursue the appropriate appellate route for resolution.

The judgment addresses complex issues related to customs classification, duty demands, jurisdictional limits, appellate remedies, and constitutional validity of writ petitions in tax matters. It underscores the legal nuances surrounding customs duty enforcement, emphasizing the hierarchy of appellate recourse and the importance of exhausting administrative remedies before seeking judicial intervention.