2017 (10) TMI 991 - HC - Customs

Maintainability of appeal - Benefit of N/N. 40/2006-CUS - Held that - this High Court do not have jurisdiction to entertain and adjudicate the present appeal. The question raised in the present appeal amongst other things relates to determination of a question relating to the rate of duty of customs and whether or not duty of customs was leviable in view of the exemption N/N. 40/2006 - reliance placed in the case of Commissioner of Service Tax Versus Ernst & Young Pvt. Ltd. And Others 2014 (2) TMI 1133 - DELHI HIGH COURT , where it was held that Determination of any question relating to rate of tax would necessarily directly and proximately involve the question, whether activity falls within the charging Section and service tax is leviable on the said activity. The said determination is integral and an important injunct to the question of rate of tax. In the context of Sections 130 and 130E of the Customs Act, 1962, it has to be held that the present appeal is not maintainable before this High Court as one of the issues amongst other things which is required to be determined and decided has a relation to the rate of duty of customs - appeal dismissed being not maintainable.

Summary

Issues:
1. Interpretation of Notification 40/2006 for exemption from customs duty on import of printing ink.
2. Jurisdiction of High Court to entertain the appeal under Section 130 of the Customs Act, 1962.

Issue 1 - Interpretation of Notification 40/2006:
The appellant challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, claiming that the respondent was not entitled to exemption from customs duty on the import of printing ink (OVI) used for printing currency notes. The appellant argued that the exemption was only applicable to printing ink used in exported products, specifically rice packed in printed polypropylene bags. The respondents disputed this claim, stating that the exemption applied to the import of printing ink for currency notes.

Issue 2 - Jurisdiction of High Court:
The respondents contended that the appeal under Section 130 of the Customs Act, 1962 was not maintainable as it related to a question concerning the rate of customs duty. Citing a previous decision, the respondents argued that the High Court did not have the jurisdiction to adjudicate on issues related to the rate of duty. The High Court, after examining the relevant legal provisions and precedents, concluded that the question raised in the appeal directly related to the determination of the rate of customs duty under Notification 40/2006. Therefore, the High Court held that it lacked jurisdiction to entertain and decide the appeal, directing the appellant to approach the Supreme Court under Section 130E of the Customs Act, 1962.

In summary, the High Court's judgment focused on the interpretation of Notification 40/2006 regarding customs duty exemption for printing ink imports and the jurisdictional limits of the High Court in cases involving questions related to the rate of customs duty under the Customs Act, 1962.