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TMI Blog2017 (9) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered under the Bills of Entry with option for redemption on the payment of redemption fine of ₹ 5,00,00,000/- in lieu of confiscation under Section 125(1) of the Customs Act, as the goods were already released provisionally, and imposed a penalty of ₹ 9,17,89,622/- with applicable interest on the petitioner in W.P.No.40081 of 2015 (hereinafter referred to as 'L T MR'), under Section 114A of the Customs Act and imposed a penalty of ₹ 1,00,00,000/- on the petitioner in W.P.No.40082 of 2015 (hereinafter referred to as 'Hyundai'). 2. As against the order impugned, the petitioners have a remedy by way of an appeal before the CESTAT. The Writ Petitions have been filed challenging the impugned order as being passed in violation of principles of natural justice; that the first respondent is bound by the International legal obligations entered into by the Government of India with the Government of Korea that the Commissioner ignored the written opinion on HS classification by Korean Customs Classification Institute; that the impugned order is bad for want of jurisdiction, as the Directorate of Revenue Intelligence (lacked jurisdiction) to issue show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reprobate. The above are broadly the grounds on which the impugned order has been challenged. 3. Mr.C.Natarajan, learned Senior counsel for the petitioner submitted that though the impugned order has been challenged on several grounds, he would restrict the grounds of challenge to two, namely, that the Courts will give due weightage to the obligations contain in bilateral treaties entered into between the two countries and in the instant case, the treaty between the India and Korea, which was reduced into writing called as India and Korea Comprehensive Economic Partnership Agreement and under Article 5.1 of the treaty, both countries agreed to administer their import and export processor for goods traded under the agreement on principles that procedures be simplified and harmonized on the basis of international standards, while recognizing the importance of balance between compliance and facilitation to ensure the free flow of trade and to meet the needs of government for revenue and protection of society; entry procedures be consistent and transparent to ensure predictability for importers and exporters. Further under Article 5.2, each party (India/Korea) shall ensure that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e intended to be used in a distributed traction system for an urban railway. A pantograph in the upper part of the T-car provides electricity, which passes through the main transformer and is transmitted to converters in the M-Cars. The converters transformer the electric current from AC (alternating current) to DC (direct current) and send it to inverters, which change the DC into three-phase AC to activate the electric motors. 5. It is submitted that though the opinion was rendered w.e.f. 01.01.2007, it has to be given due weightage and supports the classification adopted by the petitioner. Thus, it is submitted that the first respondent, while adjudicating the show cause notice, has observed that the materials placed by the petitioner, namely, the classification as approved by the Korean Customs was not called for by the Department and they have not sought for any advice from the Korean Customs and it is not understood based on what facts and technical features, such classifications were arrived by them under Tariff Heading 8603 and the same will not bind the Indian Customs, who will take independent decision based on the facts in issue in accordance with the Rules and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any tariff entry as train sets, as alleged by the petitioner and on investigation, it was found that the petitioner inspite of having specific knowledge of the tariff entry CTH 86031000 and CTH 86050000 had deliberately mis-declared the goods with an intention to evade payment of duty. It is submitted that when the petitioner's invoices makes a clear distinction with regard to the price and the nature of goods imported by L T MR sold by Hyundai, the action of filing the bill of entry as same for the both the goods lacks bonafide. Further, it is submitted that without filing an appeal before the CESTAT under Section 129A of the Act, the petitioners have filed the present Writ Petitions, which are not maintainable. It is further submitted that the issue involves classification of goods and this Court even in exercise of its appellate jurisdiction under Section 130 of the Customs Act, shall not entertain the appeal in view of specific exclusion. When the appellate jurisdiction of the High Court under Section 130 of the Customs Act, is excluded the special original jurisdiction cannot be invoked. In support of such contention, reliance was placed on the Commissioner of C.Ex. S.Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g reliance on the classification ruling rendered by the World Customs Organisation (WCO), in 57th session of the Harmonized System Committee, wherein according to the petitioner, the electric multiple unit has to be classified as a single unit under CTH 8603 as opposed to each car assessed separately before March 2016 in the impugned order, dated 25.09.2015. It is submitted that the contention raised by the petitioner is misconceived, as it is not relevant to the period of import, which being prior to March 2016, as the bill of entry was filed on 13.10.2014, after which the order of adjudication has been passed on 25.09.2015. The settled law is that the applicable rate of duty is as on the date of import and clearance of goods by filing the bill of entry, which is admittedly on 13.10.2014, whereas the opinion of the Harmonized System Committee was in March 2016. Further, it is submitted that the classification opinions of WCO are not binding and the classification of the commodity has to be decided taking into consideration the statutory rules for interpretation, chapter notes, section notes, tariff ratings. 10. Heard the learned counsels appearing for the parties and perused th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer vested with the Commissioner under Section 129D of the Customs Act; that the penalty cannot be levied and the proposal in the show cause notice is not sustainable. Personal hearing was afforded to the authorised representatives of both the L T MR and Hyundai. The first respondent has adjudicated the case and passed the impugned order holding that the trailer coaches are classifiable under CTH 8605 and not as CTH 8603, as classified by the petitioner and confirmed the proposal in the show cause notice by levying customs duty, ordering confiscation with option to redeem on payment of redemption fine and apart from imposition penalty on both the petitioners. 13. Mr.C.Natarajan, fairly submitted that as against the impugned order, the petitioner has a remedy of an appeal before the CESTAT, but the petitioner is before this Court challenging the impugned order as there is serious error in the decision making process. As pointed out earlier, though several grounds have been raised by the petitioners in the affidavit filed in support of the Writ Petition, two issues alone were canvassed before this Court by Mr.C.Natarajan. The first being that due weightage should be given to the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ennai vs. D.S.Metal (P) Ltd., (supra), 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, reported in 1993 (68) ELT 3 (SC) 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., (supra), 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. 19. In the case of United Bleachers Ltd., vs. CEGAT Chennai (supra), this Court considered whether a Writ Petition wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If it is so read, the picture that emerges is the adjudicating authority came to the conclusion, that the classification as done by the Korean Customs will not bind them and they are bound by the Indian Customs Laws and the Tariff Act and the Rules and Regulations governing the classification. Therefore, it cannot be stated that the decision making process is flawed on account of an observation made in paragraph 29 of the impugned order. Therefore, on that ground, this Court cannot exercise its jurisdiction under Article 226 of the Constitution. 23. Much emphasis was laid on the India Korea Comprehensive Economic Partnership (Treaty) to demonstrate that both the countries should assist each other in the tariff classification, valuation and determination of origin of goods for the purpose of preferential tariff treatment and each party shall notify the other party in writing, the classification of the goods of the other party determined by it and the party shall consult to address the discrepancies regarding the classification between the parties. Therefore, it is submitted that the classification of the goods by the Korean Customs cannot be ignored. Further, it is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmittedly, there has not been any amendment to the schedule to the Tariff Act, and the relevant Tariff Heading and description of goods as existing on the date of import is as hereunder:- Tariff Heading Description of goods applicable rate of duty to petitioner 86031000 Self propelled railway or tramway coaches, vans and tracks, other than those of heading 8604 NIL 86050000 Railway or tramway passenger coaches, not self propelled, luggage vans, post office coaches and other special purpose railway or tramway coaches not self propelled (excluding those of heading 8604) 3.5% 27. Thus, 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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