2017 (9) TMI 1092 - HC - Customs

Maintainability of appeal - Jurisdiction - Principles of Natural Justice - Classification of imported goods - EL-S-PR Railway Coach-TC (Coach) - re-classified as Not Self-Propelled- passenger coaches, under CTH 8605 of the first Schedule to the Customs Tariff Act, 1975 or otherwise? - if the appellate jurisdiction of this Court has been specifically excluded, when it pertains to determination of the value or regarding the classification of the goods (good), whether this Court exercising jurisdiction under Article 226 of the Constitution would be justified in testing the correctness of the impugned order? - Held that - Under Section 130(1) of the Customs Act, an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after 01.07.2003, not being an order 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. Thus, even in exercise of the appellate jurisdiction, the Division Bench of this Court should be satisfied that the case involves a substantial question of law when an appeal is filed against an order passed by the appellate Tribunal, CESTAT. The jurisdiction of the Court is excluded when such an order of CESTAT relates to determination of the rate of duty of customs or the value of the goods for the purposes of the assessment. In the case of Commissioner of Customs (Exports), Chennai vs. D.S.Metal (P) Ltd., 2015 (9) TMI 924 - MADRAS HIGH COURT , an appeal was preferred by the Revenue challenging the order passed by the CESTAT setting aside the demand by allowing the benefit of an exemption notification in favour of the respondent importer having fulfilled post importation condition of submitting end-use certificate. The Division Bench while considering as to whether appeal was maintainable on such an issue referred to the decision of the Hon ble Supreme Court in the case of Navin Chemicals Manufacturing and Trading Co., Ltd., vs. Collector of Customs, 1993 (9) TMI 107 - SUPREME COURT OF INDIA and held that the issue which arise for consideration is what will be the rate of duty that is payable by the importer, but for the notification in question and by applying the law in the case of Navin Chemicals Manufacturing and Trading Co., Ltd., and taking note of Section 130 of the Customs Act, it was held that the appeal is not maintainable, as the question has a direct and proximate relationship to the rate of duty and to the value of goods for purposes of assessment. The Writ Petition is not maintainable and the petitioner has to avail the remedy provided under the Act. This is sufficient to dismiss the Writ Petitions and relegate the petitioners to appellate remedy provided under Section 129A(1) of the Customs Act. The proper officer of customs while assessing a bill of entry has to be necessarily guided and mandatorily to follow the appropriate tariff as per the Customs Tariff Act and collect duty at the applicable rate. If on the contrary, pursuant to a bilatory treaty, the Government had amended the tariff heading, it would have been a different matter. Therefore, this issue has to be agitated by the petitioner before the appellate forum and not in a Writ Petition. Petition dismissed being not maintainable.

Issues Involved:
1. Classification of imported goods.
2. Jurisdiction and the validity of the show cause notice.
3. Violation of principles of natural justice.
4. Treaty obligations between India and Korea.
5. Admissibility and consideration of evidence from Korean Customs and World Customs Organisation.
6. Maintainability of the writ petition versus the availability of an appellate remedy.

Detailed Analysis:

1. Classification of Imported Goods:
The core issue revolves around whether the imported railway coaches should be classified under CTH 8603 as self-propelled or under CTH 8605 as non-self-propelled. The petitioner argued that the goods, described as EL-S-PR Railway Coach-TC, should fall under CTH 8603 due to their integrated nature and technical characteristics. The respondent, however, reclassified them under CTH 8605, leading to a substantial customs duty levy.

2. Jurisdiction and Validity of the Show Cause Notice:
The petitioner challenged the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue the show cause notice, arguing that the DRI lacked jurisdiction. The court noted that the DRI had jurisdiction by virtue of an amendment in 2011, referencing previous judgments that supported this stance.

3. Violation of Principles of Natural Justice:
The petitioner claimed that the impugned order was passed in violation of principles of natural justice, as the Commissioner ignored crucial evidence and opinions from the Korean Customs Classification Institute. The court, however, found that the adjudicating authority's decision-making process was not flawed merely because it did not seek advice from Korean Customs, as it was bound by Indian laws and regulations.

4. Treaty Obligations Between India and Korea:
The petitioner emphasized the India-Korea Comprehensive Economic Partnership Agreement, arguing that the classification by Korean Customs should be given due weightage. The court acknowledged the treaty but stated that the Indian Customs Laws and Tariff Act govern the classification, and any discrepancies should be addressed through the appellate process.

5. Admissibility and Consideration of Evidence from Korean Customs and World Customs Organisation:
The petitioner presented documents from Korean Customs and an opinion from the World Customs Organisation (WCO) to support their classification. The court noted that while these documents were relevant, the adjudicating authority was not bound by them and had to follow Indian laws. The opinion from the WCO, rendered after the impugned order, could not be used to set aside the order but could be raised in an appeal.

6. Maintainability of the Writ Petition Versus the Availability of an Appellate Remedy:
The court emphasized that the issue at hand was fundamentally about the classification of goods, which falls under the jurisdiction of the appellate authority, not the writ court. It was highlighted that Section 130 of the Customs Act excludes the High Court's jurisdiction in matters relating to the rate of duty or value of goods for assessment purposes. Consequently, the court dismissed the writ petitions, directing the petitioners to seek remedy through an appeal to the CESTAT.

Conclusion:
The writ petitions were dismissed as not maintainable, with the court directing the petitioners to avail the appellate remedy provided under Section 129A(1) of the Customs Act. The CESTAT was instructed to exclude the period during which the writ petitions were pending while computing the limitation for the appeal.

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