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2021 (12) TMI 1013 - HC - Central ExciseAppropriate forum - High Court or Supreme Court - issue of limitation - Decision in rem or in personam - maintainability of appeal before this Court when there is no dispute with regard to the rate of duty and / or valuation as arrived at by the Tribunal (both parties accept the decision of the Tribunal on that issue) and challenge the impugned order only to the extent of the demand being barred by limitation - whether the only issue of limitation which is subject matter of the Central Excise Appeal would lie before this Court under Section 35G or before the Hon ble Supreme Court under Section 35L of the said Central Excise Act? - HELD THAT - A comparative reading of Sections 35G and 35L of the said Act would clearly indicate that the order passed by the Appellate Tribunal on the issue of determination of any question in relation to the rate of duty of excise or to the value of goods for the purposes of assessment is maintainable under Section 35-L before the Hon ble Supreme Court only. Under Section 35L(2), it is expressly clarified that the determination of any question having a relation to the rate of duty shall include the determination of taxability or excisability of goods for the purposes of assessment. It was also observed in the said case of STEEL AUTHORITY OF INDIA LTD. VERSUS DESIGNATED AUTHORITY, DIRECTORATE GENERAL OF ANTI-DUMPING ALLIED DUTIES OTHERS 2017 (4) TMI 881 - SUPREME COURT that before admitting an appeal under Section 130E(b) of the Customs Act, 1962 (which is pari materia to Section 35L of the Excise Act), the question raised or arising must have a direct and/or proximate nexus to the question of determination of the applicable rate of duty or to the determination of the value of the goods for the purposes of assessment of duty and that this is a sine qua non for the admission of the appeal before this Court and such question must involve a substantial question of law which has not been answered or on which there is a conflict of decisions. It was further held in this case that if the tribunal, on consideration of the material and relevant facts, had arrived at a conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter. Any decision on the issue whether the revenue could have invoked the extended period of limitation for recovery of the excise duty, or would not have any bearing or impact on the rate of duty of excise or to the value of goods for the purposes of assessment. Such determination on the issue of limitation would also have no bearing on the issue of determination of taxability or excisability of goods for the purposes of assessment - the issue of limitation in this case being purely question of fact or atmost mixed question of fact and law disclosed in decision of the Tribunal would thus not be a decision in rem but has to be in personam. No appeal against the order of the Tribunal in this situation would lie before the Hon ble Supreme Court under Section 35L of the said Act. Upon careful perusal of the said exclusion to Sections 35G and 35L minutely, it can be noticed that expression determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment prescribed under Sections 130 and 130E of the Customs Act is in pari-materia to Sections 35G and 35L of the said Central Excise Act. Interpretation of both these provisions i.e. Sections 130 and 130E of the said Customs Act fell for consideration before the Hon ble Supreme Court in case of NAVIN CHEMICALS MFG. TRADING CO. LTD. VERSUS COLLECTOR OF CUSTOMS 1993 (9) TMI 107 - SUPREME COURT wherein it is held that the phrase relation to is ordinarily, of wide import but, in the context of its use in the reading Section 129C, must be read to mean a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. The Hon ble Supreme Court held that the questions relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the expression a dispute as to the classification of goods and as to whether or not they are covered by an exemption notification relating directly and proximately to the rate of duty applicable thereto for purposes of assessment . In the facts of this case, order of Tribunal holding that the revenue could not have invoked the extended period of limitation for recovery of excise duty from the respondent-assessee purely based on the finding of facts inter-se and would not fall within the purview of public importance falling under Section 35L of the said Act. In this case, it is not the case of the respondent-assessee that the issue of limitation decided by the Tribunal would involve the question of any general/public importance - the issue as to whether the revenue could have invoked the extended period of limitation for recovery of excise duty being a question of fact and/or a mixed question of fact and law, only such order cannot be impugned before the Hon ble Supreme Court under Section 35L of the said Central Excise Act. The issue of limitation raised in this Central Excise Appeal has no direct or proximate relationship to the rate of duty and the value of goods for purposes of assessment. Only such questions which relate to the rate of duty and the value of goods for purposes of assessment would squarely fall within the meaning of the said expression determination of any question having relationship to the rate of duty and to the value of goods for the purposes of assessment - the adjudication on the said issue of limitation in the Central Excise Appeal filed by the revenue under Section 35G before this Court even remotely, would not determine either the rate of duty of excise or the value of goods for the purposes of assessment. The order, if any passed in appeal under Section 35G would also not determine the taxability or excisability of the goods for the purposes of assessment. The provisions of Sections 130 and 130E of the Customs Act are in pari-materia to Sections 35G and 35L. A party may seek to challenge only that part of the order of the Tribunal which relates to questions other than those relating to the rate of duty or the value of the goods for the purposes of assessment. In the facts of this case, the revenue could challenge only part of the order having aggrieved on the issue of limitation. The appeal thus filed by the revenue is maintainable under Section 35G of the said Act before this Court. In this case, the issue of recovery of excise duty and issue of rate and classification of dispute decided by the Tribunal against the respondent-assessee has attained finality. It is not the case of the revenue of challenging any portion of the order selectively though aggrieved by the larger part of the order or entire order. An appeal under Section 35G(1) of the Act would be maintainable before this Court when there is no dispute with regard to the rate of duty and / or valuation as arrived at by the Tribunal (both parties accept the decision of the Tribunal on that issue) and challenge the impugned order only to the extent of the demand being barred by limitation. Appeal is maintainable against the respondent in this Court - Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Maintainability of appeal under Section 35G of the Central Excise Act when the issue pertains to limitation. 2. Whether the issue of limitation has a direct relation to the rate of duty or value of goods for assessment purposes. Issue-wise Detailed Analysis: 1. Maintainability of Appeal under Section 35G: The core issue was whether an appeal under Section 35G of the Central Excise Act is maintainable when the dispute pertains solely to the limitation for demanding duty. The court analyzed Sections 35G and 35L of the Central Excise Act, which are in pari materia with Sections 130 and 130E of the Customs Act. The court noted that Section 35G allows appeals to the High Court except for orders relating to the rate of duty or value of goods for assessment purposes, which fall under Section 35L and are appealable to the Supreme Court. The court referred to previous judgments, including the Supreme Court's decision in Commissioner of Customs, Bangalore-1 v/s. Motorola India Ltd., which emphasized that the nature of the order passed by the Tribunal determines the maintainability of the appeal. The court concluded that the issue of limitation does not have a direct and proximate relationship to the rate of duty or value of goods for assessment, thus making the appeal maintainable under Section 35G. 2. Relation of Limitation Issue to Rate of Duty or Value of Goods: The court examined whether the issue of limitation has any bearing on the rate of duty or the value of goods for assessment. It was noted that the Tribunal had confirmed the demand of duty, interest, and penalty but set aside the demand on the ground of limitation. The court observed that the issue of limitation is a mixed question of fact and law and does not impact the determination of the rate of duty or value of goods. The court cited the Supreme Court's interpretation in Navin Chemicals Mfg. & Trading Co. Ltd. v/s. Collector of Customs, which clarified that the phrase "relation to" must mean a direct and proximate relationship to the rate of duty and value of goods for assessment. The court held that the determination of whether the revenue could invoke the extended period of limitation does not affect the rate of duty or value of goods for assessment purposes. Conclusion: The court concluded that the appeal filed by the revenue under Section 35G is maintainable as it pertains solely to the issue of limitation, which does not have a direct or proximate relationship to the rate of duty or value of goods for assessment. The court answered the referred questions as follows: (a) The issue of a demand being time-barred when based on valuation or rate of duty is not related to the assessment of goods, making the appeal maintainable under Section 35G. (b) An appeal under Section 35G(1) is maintainable when there is no dispute regarding the rate of duty or valuation, and the challenge is only on the ground of limitation. The case was directed to be placed before the Division Bench for further consideration of the appeal.
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