2024 (12) TMI 684 - HC - Customs

Maintainability of appeal before High Court - appropriate forum - interpretation of policy circulars, notifications, and Foreign Trade Policy - mis-declaration of description of export goods and value addition in the export documents and without complying with the norms specified in Foreign Trade Policy - evasion of customs duty on gold under replenishment scheme - HELD THAT - In the instant case, from perusal of the show cause notice dated 31.08.2018, it is evident that the same was issued on the ground that the respondent has mis-declared the description and value addition so as to wrongly claim the benefit under the replenishment scheme. From the order passed by the Adjudicating Authority as well as the Tribunal, it is evident that the issue with regard to mis-declaration as well as applicability of Notification No. 57/2000-Customs, dated 08.05.2000, and the Circular No. 27/206-Customs, dated 10.06.2016, issued by the Central Board of Excise Customs as well as the Foreign Trade Policy 2015-20 was also involved. Therefore, the appeals before this Court are maintainable. The issue in the instant appeals pertains to demand of duty on quantum of gold given under replenishment scheme received from the LLP. It is not the case of the appellant that matching quantum of gold has not been exported as required under N/N. 57/2000-Customs - The findings of fact are recorded on the basis of proper appreciation of material available on record. The findings have not even been assailed on the ground that the same are perverse. Thus, no substantial questions of law arise for consideration in these appeals - appeal dismissed.

Summary

Issues:
Appeal under Section 130 of the Customs Act, 1962 regarding interpretation of policy circulars, notifications, and Foreign Trade Policy; Allegations of mis-declaration and evasion of customs duty on gold under replenishment scheme; Maintainability of appeals before the High Court based on substantial questions of law.

Analysis:

The appeals before the High Court arose from a common order passed by the Customs, Excise and Service Tax Appellate Tribunal, Regional Bench at Hyderabad. The respondent, engaged in the import of rough diamond, gold, and silver, imported duty-free gold for supply to jewellery exporters under various schemes. Allegations arose that an LLP fraudulently obtained duty-free gold from the respondent under a replenishment scheme, leading to evasion of customs duty. Search proceedings were conducted on the LLP's premises, resulting in a show cause notice proposing duty demand and penalties. The Tribunal allowed the respondent's appeals, holding no violation of customs conditions and incorrect value addition calculation. The issue involved interpretation of policy circulars, notifications, and mis-declaration of goods.

The main contention raised by the Senior Standing Counsel for the appellants was that the Tribunal erred in interpreting the policy circulars and notifications, specifically regarding the value of goods and mis-declaration during the manufacturing process. It was argued that the job worker's process was not fully mechanized, justifying a higher value addition percentage. Additionally, it was claimed that the respondent violated customs provisions and mis-declared the manufacturing process, attracting Section 113(i) of the Act. Reference was made to relevant circulars and notifications to support this argument.

On the other hand, the Senior Counsel for the respondents in different appeals contended that the High Court appeals were not maintainable and should have been filed before the Supreme Court. They argued that the Tribunal's findings were based on evidence and not perverse. Reference was made to a Supreme Court decision to support the argument on maintainability. The respondent in one appeal highlighted that the dispute did not concern valuation under the Act, making the appeals maintainable but asserted that no substantial questions of law were at issue.

The High Court examined the maintainability of the appeals under Section 130 of the Act, emphasizing that if an order related to the rate of customs duty or value of goods for assessment, the appeal lay before the Supreme Court. It was concluded that mis-declaration issues and compliance with customs notifications were involved, justifying the appeals before the High Court. The Court then analyzed the Tribunal's findings, which were based on a meticulous review of evidence, and upheld the conclusions without finding any perversity. Consequently, no substantial questions of law were deemed to arise, leading to the dismissal of the appeals.

In the final judgment, the appeals were dismissed, and any pending miscellaneous applications were closed without costs being awarded. The judgment highlighted the importance of proper appreciation of material on record and the absence of grounds to challenge the Tribunal's findings as perverse.