2022 (4) TMI 791 - HC - Customs

Maintainability of appeal - Classification of export goods - ropes made of PP (Polypropylene) and PP Polyester - Re-opening of assessment order by issue of SCN u/s 124 read with Section 28 of the Customs Act - no appeal was preferred - penalty on the Directors/CEO of the Respondent Company and on the Respondent Company as well - limiting the scope of de-novo adjudication while remanding back the matter to the adjudicating authority - HELD THAT - The entire controversy or the origin of the entire controversy is classification dispute which relates primarily to the determination of question of levy of duty applicable. The appellant may prefer an appeal before the Hon ble Supreme Court of India and this court will have no jurisdiction. Appeal dismissed.

Summary

Issues:
Jurisdiction of the High Court under Section 130(1) of the Customs Act, 1962 to hear an appeal involving substantial questions of law related to classification and duty levy.

Analysis:
1. The appellant challenged an order passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) regarding the classification and exportation of goods, proposing three substantial questions of law. However, during the hearing, the appellant reframed the substantial questions of law, abandoning the initial questions and introducing new ones.

2. The respondent raised a preliminary objection on the jurisdiction of the High Court, arguing that the appeal should be filed before the Supreme Court of India under Section 130(E) of the Act due to the nature of the dispute being a classification issue directly related to the rate of customs duty.

3. The appellant contended that the appeal did not pertain to the classification of goods but focused on other issues. However, the Court disagreed, emphasizing that the main controversy revolved around a classification dispute, as evident from the show cause notice and the orders passed by the authorities.

4. The Court highlighted that the determination of duty levy under Section 28 of the Act is intricately linked to the classification of goods. It was emphasized that without deciding on the classification, it is impossible to ascertain the correct duty to be levied, thus underscoring the significance of classification in duty determination.

5. The Court reiterated that the entire dispute, including the proposed substantial questions of law, stemmed from the classification issue, which directly impacts the levy of customs duty. Consequently, the Court concluded that the appeal should be filed before the Supreme Court of India, as the jurisdiction of the High Court was not applicable in this case.

6. Ultimately, the Court dismissed the appeal, affirming that the appellant should prefer an appeal before the Supreme Court of India due to the classification dispute forming the crux of the controversy and the duty levy implications.

This detailed analysis outlines the jurisdictional challenge raised, the arguments presented by both parties, and the Court's reasoning for dismissing the appeal based on the classification dispute's central role in the case.