2020 (1) TMI 848 - HC - Customs

Classification of goods - Kapok - whether Kapok could not be classified under heading 53.05 or not? - HELD THAT - There is no finding in the order of the Tribunal as to whether the observations of the Commissioner (Appeals) that Kapok could not be classified under heading 53.05, are correct or not. No appeal was filed by the Respondents on this count. The question would now remain whether the Kapok could be classified under heading 14.04. The argument that the Commissioner (Appeals) in the appeal can never look into a different entry is belied by the proviso to Section 128A of the Act. However, a procedure is laid down in the said proviso. A prior notice and time limit is contemplated. The contention of the Appellant that such a notice, even if it is issued, was beyond time even on the date the Commissioner passed the order can be made by the Appellant before the Commissioner (Appeals) in the remanded proceedings. Therefore, the learned Counsel for the Respondent is right in contending that a question of law as proposed does not arise from the impugned order. - appeal disposed off.

Summary

Issues:
Challenge to order of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) remanding matters to Commissioner (Appeals) with observations. Interpretation of show cause notice regarding customs duty short levy. Classification of goods under specific headings. Applicability of Section 28 of Customs Act. Correctness of remand order by CESTAT.

Analysis:
The judgment involves a challenge to a CESTAT order remanding matters to the Commissioner (Appeals) with specific observations. The Appellant questioned the correctness of the Final Order dated 07.03.2019 passed by CESTAT, raising substantial questions of law regarding the remand decision. The proceedings initiated against the Appellant stemmed from a show cause notice issued by the Commissioner of Customs, Nhava-Sheva, on 21 December 2010, alleging a customs duty short levy amounting to Rs. 18,68,062. The dispute revolved around the classification of imported goods (Kapok) under different headings, leading to the invocation of Section 28 of the Customs Act.

The Appellant had appealed to the Commissioner of Customs (Appeals) after the Assistant Commissioner of Customs confirmed the demand raised in the show cause notice. The Commissioner (Appeals) disagreed with the initial classification by the Appellant under heading 52.01 or 53.05, instead placing the goods under Entry 14.04. Subsequently, the Appellant approached CESTAT, which remanded the case to the Commissioner (Appeals) for further examination. The Tribunal emphasized the need to determine whether Kapok was primarily used for manufacturing textiles before reaching a conclusion.

In response to the remand order, the Appellant argued that the show cause notice had lapsed since the Commissioner (Appeals) had exceeded its scope. The Appellant contended that the Tribunal failed to address the Commissioner's observations on the classification issue and questioned the necessity of a new notice for considering a different entry under Section 128A of the Customs Act. The judgment highlighted the procedural requirements for such considerations and left room for the Appellant to raise these arguments before the Commissioner (Appeals) during the remanded proceedings.

Ultimately, the Court disposed of the Appeals, indicating that the questions of law proposed by the Appellant did not directly arise from the impugned order. The judgment underscored the need for adherence to procedural requirements and the opportunity for the Appellant to present their case before the Commissioner (Appeals) as directed by CESTAT.