SCOPE OF APPEAL TO SUPREME COURT UNDER SECTION 130E(b) OF CUSTOMS ACT, 1962

[Mr. M. GOVINDARAJAN]

Appeal to Supreme Court

Section 130E of the Customs Act, 1962 provides for filing appeal before Supreme Court.  This section provides two types of appeals to Supreme Court.  Section 130 E(a) provides appeal against the order of the High Court.  Section 130 E(b) provides appeal against the order of the Tribunal. 

Section 130 E (a) provides that an appeal shall lie to the Supreme Court from any judgment of the High Court delivered –

•  in an appeal made under section 130; or
• on a reference made under section 130 by the Appellate Tribunal before the 1st day of July, 2003;
• on a reference made under section 130A,

in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved, immediately after passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court.

Section 130E(b) provides that an appeal shall lie to the Supreme Court from any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment.

Conditions to be satisfied

In ‘Steel Authority of India Limited v. Designated Authority, Directorate General of Anti Dumping & Allied Duties & others’ – 2017 (4) TMI 881 - SUPREME COURT,  the scope o an appeal under section 130E(b) of the Customs Act has been dealt with in detail.  The Supreme Court, in this case, held that the following conditions must be satisfied for exercise of jurisdiction under section 130E(b) of the Customs Act-

• The question raised or arised 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 purpose of assessment of duty.This is sine qua non for the admission of the appeal before the Supreme Court under section 130E(b) of the Customs Act.
• The question appealed must involve a substantial question of law which has not been answered or, on which, there is a conflict of decisions necessitating a resolution.
• If the Tribunal, on consideration of material and relevant facts, ha arrived at a conclusion which is a possible conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter.
• The Tribunal had acted in gross violation of the procedure or principles of natural justice occasioning a failure of justice.

Appeal on questions of fact

In ‘Commissioner of Customs – I v. AASU Exim Pvt. Ltd., - 2017 (12) TMI 107 - SUPREME COURT the Revenue found that there was misdeclaration by the assessee with regard to the grade of items imported by the Assessee.  The Revenue was of the opinion that the goods were to be graded only as Grade ‘A’ and ‘AA’.  But the assessee had graded the goods under the grades A, B and C.  The  Adjudicating Authority confirmed the demand of duty to the tune of ₹ 4,79,11,879/-.  The First Appellate Authority confirmed the demand of the lower authority on the appeal filed before him by the assessee.  The assessee filed appeal before the Tribunal.  The Tribunal allowed the appeal filed by the assessee.

The Tribunal found that the following documents produced by the assessee were not disputed by the Revenue-

• Contract between the manufacturer and the supplier;
• Contract between the supplier and the appellants;
• Invoice raise by the manufacturer on the supplier;
• Letter dated 22.12.2000 of the Board of Foreign Trade, Ministry of Economic Affairs, Taiwan, confirming that grades B,C and D also exist;
• Detailed note/letter of the manufacturer setting out the parameters of grading adopted by the manufacturers of the yarn in question.

The Tribunal found that the above documents are sufficient to reverse the finding of the primary and the First Appellate Authority on the point of grading.  In regard to the transaction value the Tribunal took into account that a total of 16 bill of entry were relied upon by the Revenue claiming the same to be the evidence of contemporaneous value of imported yarns i.e., Partially Oriented Yarn of Polyester (POY), Polyester Textured Yarn (PTY) and Polyester Filament (PFY).  None of the aforesaid bills of entry were relatable to PTY whereas eight bills of entry were relatable to POY and PFY each.    The Tribunal therefore held that the claim of the Revenue on the basis of contemporaneous records is not established and what was done a determination/assessment based on the standing order which is prohibited by Rule 8(2)(v) of the Customs Valuation Rules, 1988.

The Revenue filed appeal before the Supreme Court against the order of the Appellate Tribunal before Supreme Court under section 130(E)(b) of the Customs Act, 1962.  According to Supreme Court the grading itself found to be inaccurate the transaction value on the basis of such grading was held to be unacceptable.  The Supreme Court observed that the findings of the Tribunal is that almost half of number of the said bills of entry relating to each item of yarn i.e., POY and PFY did not pertain to the yarns imported by the assessee an, in case of the rest, there was a variance in the price mentioned in the aforesaid bills of entry and those in the standing order; yet the prices mentioned in the said standing order was adopted to determine the transaction value.

If the basis on which the Tribunal had arrived at its conclusion and thought it proper to reverse conclusions of the primary and First Appellate Authority is to be considered in the light what has been stated above, the Supreme Court will have no hesitation in coming to the conclusion that in the present case the Tribunal has arrived at a conclusion which is possible and permissible upon due consideration of the relevant materials.

The issues raised and arguments advanced by the Revenue would go to show that questions with regard to the correctness of the finings recorded by the Tribunal has been raised in the present appeal which are essentially findings of fact. No question of law much less a substantial question of law of general importance arises for consideration in the present appeal.  The Supreme Court declined to interfere with the orders of the Tribunal.  The Supreme Court dismissed the appeal filed by the Revenue and affirmed the order of the Tribunal.