2017 (8) TMI 581 - HC - Customs

Import of, and trading in unbranded gold jewellery - smuggling - benefit of N/N. 12/2012 (CE) dated 17.03.2012 - Held that - Sub-section (1) of section 130 uses the expression determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment . In the present case, the issue for consideration is, simply put, whether the assessee is to be called upon to pay 6% or 1% duty. The satisfaction of conditions for eligibility to claim the concessional rate is a mere factor relevant to determine the actual liability. The expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. The issue that was formulated as the lis between the parties was the applicable rate of duty to the transaction at issue - Appeal dismissed being not maintainable.

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Notification 12/2012.
2. Maintainability of the appeal under Section 130 of the Customs Act.
3. Applicability of judgments cited by the Revenue and the assessee.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional Rate of Duty under Notification 12/2012:

The assessee-respondent, engaged in importing and trading unbranded gold jewellery, filed a bill of entry for home consumption and declared an assessable value of ?2,95,69,876.13, computing the CVD at 6% along with cess and additional duty. On the date of clearance, two notifications were prevailing: Notification 12/2012 (CE) which imposed a 1% duty under certain conditions, and Notification 2/2011 as amended by Notification 23/2012 which imposed a 6% duty. The assessee sought the benefit of the 1% duty under Notification 12/2012, arguing that they had not availed of CENVAT credit and thus were eligible for the concessional rate. However, the first Appellate Authority rejected this claim, stating that the assessee was ineligible for the reduced rate as the goods were imports with no claim of CENVAT credit. The CESTAT, however, allowed the assessee's appeal, holding that the assessee was eligible for the 1% duty as the condition of non-availment of CENVAT credit was not relevant in the case of imports where the credit itself would not arise.

2. Maintainability of the Appeal under Section 130 of the Customs Act:

The respondent raised a preliminary objection regarding the maintainability of the appeal, citing Section 130(1) of the Customs Act, which states that appeals to the High Court are not maintainable for orders relating to the determination of any question having a relation to the rate of duty or the value of goods for assessment purposes. The court examined whether the issue at hand directly related to the rate of duty. The court referenced several judgments, including Navin Chemicals Manufacturing and Trading Company Ltd. Vs. Collector of Customs and Commissioner of Central Excise Vs. Harichand Sri Gopal, which clarified that the determination of the rate of duty or valuation for assessment purposes falls outside the jurisdiction of the High Court under Section 130. The court concluded that the issue was indeed about the applicable rate of duty (1% or 6%), making the appeal non-maintainable.

3. Applicability of Judgments Cited by the Revenue and the Assessee:

The CESTAT relied on the Supreme Court judgments in SRF Ltd. Vs. CC Chennai and ITC Ltd. Vs. CC New Delhi, which addressed the rejection of the assessee's claim based on the non-satisfaction of conditions related to CENVAT credit. These judgments established that the non-availment of CENVAT credit in the case of imports does not disqualify the assessee from claiming the concessional rate under Notification 12/2012. The court also referred to the Bombay High Court's ruling in Thermax Private Limited Vs. Collector of Customs, affirmed by the Supreme Court, which stated that for additional duty on imports, it could be deemed that the imported article was manufactured in India, thus quantifying the excise duty accordingly. The court found that these precedents supported the CESTAT's decision to allow the benefit of the 1% duty to the assessee.

Conclusion:

The court dismissed the appeal as non-maintainable, emphasizing that the core issue was the determination of the applicable rate of duty, which falls outside the High Court's jurisdiction under Section 130 of the Customs Act. The CESTAT's decision to grant the concessional rate of 1% duty under Notification 12/2012 was upheld based on relevant Supreme Court judgments.