2023 (7) TMI 1408 - HC - Customs

Applicability of Monetary limits where substantial question of law arises - condonation of delay - It was contended that the appeal would not lie since it is only where the duty element is in excess of Rs. 10 lakhs that the Department would have been justified in instituting an appeal - HELD THAT - Since the respondent is duly represented let a reply be filed within a period of three weeks from today. The Court takes note of the preliminary objection which is urged by learned counsel for the respondent and rests upon the Litigation Policy as adopted by the Central Board of Indirect Taxes Customs CBEC and embodied in the Instructions dated 17 August 2011. We find ourselves unable to sustain the aforesaid submissions for the following reasons. Firstly the Litigation Policy does not while prescribing the monetary limits allude to a dispute being raised with respect to duty element involved. In any view of the matter we are informed that the duty element in the present case exceeds Rs. 1 crore. Additionally we also take note of the submission of Mr. Kumar learned Standing Counsel appearing for the appellant that the issue itself pertains to the redemption of gold and the interpretation to be accorded to Section 125 of the Customs Act 1962 the Act and the expression prohibited goods as appearing therein. In our considered opinion once the appeal is found to raise an important question of law and which is likely to impact a large number of cases the monetary limit as specified in the Litigation Policy would not be construed to be a deterrent. The Court also bears in mind that an identical question forms subject matter of W.P. and other connected matters on which judgment has been reserved. The preliminary objection consequently stands negated. Admit. Having heard learned counsels for parties we are of the considered view that the following question of law arise for consideration - Whether gold could be said to fall in the prohibited category as contemplated u/s 125 of the Act and thus not liable to be released on payment of redemption fine? List again.

Summary

Issues involved:
Condonation of delay in filing appeal, interpretation of Litigation Policy u/s CBEC, monetary limits for appeal, redemption of gold u/s Customs Act, important question of law impacting cases.

The judgment addresses the issue of condonation of delay in filing the appeal. The Court condones a delay of 15 days in filing the appeal, taking into account the disclosures made and disposes of the application accordingly.

Regarding the interpretation of the Litigation Policy u/s CBEC, the Court notes a preliminary objection raised by the respondent based on the Policy's monetary limits. The Court finds the objection unsustainable as the Litigation Policy does not specifically refer to a dispute concerning the duty element involved. It is highlighted that the duty element in the present case exceeds Rs. 1 crore, which is a significant factor.

The judgment also delves into the issue of redemption of gold u/s Customs Act. The Court considers the submission related to the interpretation of Section 125 of the Act and the classification of gold as "prohibited goods." It opines that if an appeal raises an important question of law likely to impact numerous cases, the monetary limit specified in the Litigation Policy should not act as a deterrent.

Furthermore, the Court acknowledges that a similar question is pending in another case, indicating that the issue is not isolated. The Court admits the appeal and identifies the key question of law to be considered: whether gold can be categorized as prohibited under Section 125 of the Act, thereby not liable for release upon payment of redemption fine.

The judgment schedules a further hearing on 15.09.2023 to continue the consideration of the legal question at hand.