2021 (12) TMI 1159 - HC - Customs

Maintainability of appeal - Jurisdiction of HC to entertain an appeal against the order of CESTAT - foreign-going vessel or not - scope of eligible order namely the duty of customs - Whether the order under appeal is an eligible order for appeal under Section 130 of the Act or not? - HELD THAT - It is axiomatic that appeal is a statutory right conferred by Legislature on an aggrieved party. There is no inherent right of appeal to an aggrieved party and, in the case on hand, the right of appeal is covered by Sections 130 and 130E of the Act. The scheme of Customs Act envisages redressal mechanism by way of appeal under Section 128 from primary authority to Commissioner; further from the order of Commissioner to the CESTAT constituted under Section 129; from the order of CESTAT to the High Court under Section 130; or to the Supreme Court under Section 130E. The order of the High Court is again appealable under Section 130E to Supreme Court. An appeal is nothing but a proceeding where a higher Forum reconsiders the decision of the lower Forum on questions of fact and questions of law with jurisdiction authority to confirm, reverse, modify the decision or remand the matter to the lower Forum for fresh decision in terms of its directions. An appeal is a creature of Statute and there is no inherent right of appeal. The High Court while taking up an issue on the objection raised on the jurisdiction to maintain the appeal, as contended by respondent, cannot proceed that jurisdiction is conferred by the appellant or that the jurisdiction could be inferred in the circumstances of the matter. But, the principle is jurisdiction should be available. The decisions relied on by the appellant in support of its case that the jurisdiction of this Court cannot be invited to challenge the order under appeal are distinguishable. No decision on the point of foreign-going vessels having precedential value has been brought to our notice - The questions formulated by the appellant or such other questions that may be formulated by this Court under Section 130(3) of the Act, hear the parties and dispose of the appeal. We have taken sufficient care to hear and not advert to any of the circumstances in issue on the main question between the parties, and even reference is made in this order, the same is for the limited purpose of finding out whether this Court ought to proceed with hearing the appeal on merits or not. The question of limitation may also be one of the questions the Court may consider while disposing of the appeal. Application disposed off.

Summary

Issues Involved:
1. Maintainability of the appeal under Section 130 of the Customs Act, 1962.
2. Status of the vessel C S Asean Explorer as a foreign-going vessel under Section 2(21) of the Customs Act.
3. Applicability of Section 87 of the Customs Act regarding exemption from customs duty on stores consumed by the vessel.

Detailed Analysis:

1. Maintainability of the Appeal:
The primary issue examined is whether the High Court has jurisdiction to entertain the appeal under Section 130 of the Customs Act, 1962. The appellant, Commissioner of Customs, challenged the CESTAT's order dated 18.02.2020, which accepted the respondent's claim that C S Asean Explorer is a foreign-going vessel and thus exempt from customs duty on stores consumed under Section 87 of the Act.

The respondent contended that the appeal is not maintainable under Section 130 as it involves the determination of questions related to the rate of duty or the value of goods, which should be appealed to the Supreme Court under Section 130E. However, the appellant argued that the core issue is the status of the vessel as a foreign-going vessel, which does not relate to the rate of duty or value of goods but rather to the applicability of Section 87.

The Court analyzed the statutory scheme and definitions under the Customs Act, particularly Sections 2(2), 2(15), 2(21), 2(38), 87, 130, and 130E. It concluded that the jurisdictional fact for consideration is whether C S Asean Explorer qualifies as a foreign-going vessel. The Court held that this issue does not fall under the exceptions provided in Section 130, which pertain to the rate of duty or value of goods for assessment purposes. Therefore, the appeal is maintainable before the High Court.

2. Status of C S Asean Explorer as a Foreign-Going Vessel:
The Commissioner of Customs had imposed various penalties and demanded duty on the stores consumed by C S Asean Explorer, arguing that it did not qualify as a foreign-going vessel since it was berthed at Cochin Port for a significant period and did not engage in voyages to ports outside India.

The CESTAT, however, held that C S Asean Explorer is a foreign-going vessel as defined under Section 2(21) of the Customs Act. The Tribunal noted that the vessel was engaged in operations under the 'South East Asia and Indian Ocean Cable Maintenance Agreement' and was based at Cochin Port for operational preparedness, which does not disqualify it from being a foreign-going vessel.

The High Court, while considering the maintainability of the appeal, did not delve into the merits of this issue but acknowledged that the status of the vessel as a foreign-going vessel is the central question for determination in the appeal.

3. Applicability of Section 87 of the Customs Act:
Section 87 provides that imported stores on board a foreign-going vessel may be consumed without payment of duty during the period the vessel is a foreign-going vessel. The respondent claimed exemption under this provision for the stores consumed by C S Asean Explorer.

The Commissioner of Customs had rejected this claim, leading to the imposition of duty and penalties. The CESTAT, however, accepted the respondent's claim, holding that the vessel qualifies as a foreign-going vessel and thus the stores consumed are exempt from duty under Section 87.

The High Court, in its analysis of the maintainability issue, noted that the determination of whether the vessel is a foreign-going vessel directly impacts the applicability of Section 87 and the exemption from duty. The Court concluded that this issue does not involve the rate of duty or value of goods but rather the status of the vessel, making the appeal maintainable before the High Court.

Conclusion:
The High Court overruled the preliminary objection on the maintainability of the appeal, holding that the core issue is the status of C S Asean Explorer as a foreign-going vessel, which does not fall under the exceptions provided in Section 130 of the Customs Act. The appeal is thus maintainable before the High Court, and the case was posted for hearing on merits after three months.