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2022 (1) TMI 724 - HC - CustomsClassification of imported goods - Base Oil SN50 - classified under the CTH 27101960 or not - onus to establish the cargo as High-Speed Diesel discharged by Revenue or not - confiscation of prohibited goods - levy of penalty - maintainability of appeal for determination of any question having a relation to the rate of duty of Customs or to the value of goods for purposes of assessment - HELD THAT - Application admitted on substantial questions of law. Notify all the three Tax Appeals for final hearing on 12th January 2022 on top of the Board.
Issues involved:
1. Classification of imported goods as High Speed Diesel or Base Oil. 2. Maintainability of appeals before the High Court under Section 130 of the Customs Act, 1962. Issue 1: Classification of imported goods as High Speed Diesel or Base Oil: The case involved three Tax Appeals under Section 130 of the Customs Act, where the Revenue challenged the order passed by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT). The Tribunal had allowed the appeals filed by the respondents, stating that the product imported was not High Speed Diesel but Base Oil. The dispute arose when the Directorate of Revenue Intelligence (DRI) officers suspected that the imported product was High Speed Diesel, not Base Oil. Laboratory reports confirmed the product as High Speed Diesel, leading to a show cause notice for confiscation and penalties under the Customs Act. The Commissioner of Customs reclassified the goods as HSD and imposed penalties. The respondents appealed to CESTAT, which ruled in their favor, prompting the Revenue to appeal to the High Court. Issue 2: Maintainability of appeals before the High Court under Section 130 of the Customs Act, 1962: During the hearing, the respondents' counsels raised a preliminary objection regarding the maintainability of the appeals before the High Court under Section 130 of the Act. They argued that the appeals involved questions related to the rate of duty of customs and classification, which should be appealed to the Supreme Court under Section 130E. The counsels contended that the appeals did not raise substantial questions of law justifying High Court intervention. On the other hand, the Revenue argued that the appeals were maintainable before the High Court as they did not relate to the determination of the rate of duty or the value of goods for assessment purposes. The Additional Solicitor General of India representing the Revenue argued that the imported goods were prohibited as HSD, making confiscation and penalties necessary. He emphasized that the classification was for identifying the disputed products, not for determining the rate of duty. The Revenue contended that the Tribunal's findings were illegal and perverse, constituting a substantial question of law for the High Court to consider. The argument was supported by a Supreme Court decision highlighting the direct relationship between questions of duty, value, and assessment. After hearing all parties, the High Court decided to admit all three appeals based on substantial questions of law raised by the Revenue. The Court framed additional questions to address the appeal's maintainability under Section 130 of the Act. The Court scheduled final hearings for the Tax Appeals and ordered the continuation of the interim order in Civil Applications. This detailed analysis covers the classification dispute between High Speed Diesel and Base Oil, as well as the legal arguments regarding the maintainability of the appeals before the High Court under the Customs Act, 1962. The judgment's nuances, arguments presented by both parties, and the Court's decision to admit the appeals have been comprehensively explained.
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