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2018 DIGILAW 952 (PNJ)

Commissioner of Customs v. Golden Enterprises

2018-02-22

AVNEESH JHINGAN, S.J.VAZIFDAR

body2018
JUDGMENT : S.J. VAZIFDAR, J. 1. This is an appeal against the orders of the Customs Excise and Service Tax Appellate Tribunal dated 12.07.2016 and 18.04.2017. 2. By the order dated 12.07.2016, the Tribunal, inter-alia, in express terms, decided the valuation of the imported goods. The dispute between the parties is whether the goods that were imported were ‘pressed distillate oil’, as contended by the respondent/assessee, or whether they were ‘base oil’, as contended by the appellant. The Tribunal, in paragraph 11 stated: “Next we turn to the valuation of the imported goods.” The Tribunal held that there was insufficient evidence to establish mis-declaration and consequently the determination of the value on the basis of the price of base oil was erroneous. The Tribunal observed that consequently there was no basis to disregard the declared value. In paragraph 12, the Tribunal expressly stated that there was no valid reason to reject the classification or valuation of imported goods. 3. The appellant had challenged that order by filing CUSAP No.2 of 2017 (O&M) which was disposed of by the following order and judgment of the Division Bench, to which one of us (S.J. Vazifdar, C.J.) was a party, on 09.02.2017:- “Mr. Jagmohan Bansal, learned counsel appeared on behalf of the respondent stating that he is instructed by Mr. Pawan Kumar Suri. 2. With the consent of the parties, the matter is remanded to the Tribunal only for the purpose of deciding the issues relating to the findings in paragraph 4.2 (iii) (iv) (v)(a) and paragraph 4.5 of the order dated 22.02.2016 of the adjudicating authority and the paragraphs relating thereto. In view of the fact that the goods have been in the custody of the appellant for about four years, we would request the Tribunal to decide this issue preferably by 31.03.2017. 3. The parties shall in the first instance appear before the Tribunal on 13.02.2017 and thereafter as directed by the Tribunal. We express no views or opinion in respect of the order dated 22.02.2016 in so far as it relates to valuation and classification. 4. The appeal is accordingly disposed of.” 4. We have set out the order only because it was relied upon by the parties. It does not determine any question of law as the order itself states that it was passed with the consent of the parties. 4. The appeal is accordingly disposed of.” 4. We have set out the order only because it was relied upon by the parties. It does not determine any question of law as the order itself states that it was passed with the consent of the parties. Upon remand, the other impugned order dated 18.04.2017 was passed. The order directed the revenue to release the goods immediately to the appellant. The order, inter-alia, took into consideration the first impugned order, namely, the order dated 12.07.2016 in which the issue of alleged mis-declaration was decided in favour of the respondent. 5. The above facts support the preliminary objection raised by Mr. Jagmohan Bansal, the learned counsel appearing on behalf of the respondent, that the appeal is not maintainable before this Court and is maintainable only before the Supreme Court. We will assume that there are issues other than those of valuation and classification involved. That would make no difference to the maintainability of the appeal as the same also involves the issues of valuation and classification and, in any event, the issue of classification. We have already referred to the orders in this regard. 6. In Principal Commissioner of Central Excise and Service Tax vs. M/s Raja Dyeing, Ludhiana, CEA No.18 of 2016, a Division Bench of this Court, to which one of us (S.J. Vazifdar, C.J.) was a party, by an order and judgment dated 14.03.2017 dealt with a similar objection with respect to an appeal under section 35G of the Central Excise Act. Section 35G (1) reads as follows:- “35G. Appeal to High Court- (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law.” 7. The Division Bench held that so long as the question of valuation or classification arises the appeal would not be maintainable before the High Court even if other issues are raised in view of section 35G(1) of the Central Excise Act. The Division Bench held:- “11. The Division Bench held that so long as the question of valuation or classification arises the appeal would not be maintainable before the High Court even if other issues are raised in view of section 35G(1) of the Central Excise Act. The Division Bench held:- “11. The words “among other things” in Section 35 G are of singular importance in determining the ambit of Section 35 G. These words indicate that an appeal is maintainable under Section 35 G to the High Court only if the order passed in appeal by the Tribunal is not one relating to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment, an appeal against that order would lie only to the Supreme Court under Section 35 Land not to the High Court under Section 35 G. This would be so even if the appeal is only in respect of questions other than the rate of duty or the value of the goods for the purpose of assessment. It is the nature of the order of the Tribunal and not the scope of the appeal that determines the maintainability of the appeal under Section 35 G. 12. It is not necessary to look far for the reason for this provision. The intention is to consolidate all appeals from the order of the Tribunal in one Court - either in the High Court or in the Supreme Court. A contrary view would result in multiple appeals being filed before both the Courts where the order of the Tribunal relates to the determination of questions having a relation to the rate of duty of excise or value of goods as well as to other questions. In such cases the party which desires challenging the order of the Tribunal relating to both types of questions would have to file one appeal in the High Court and another in the Supreme Court. The party which desires challenging one type of issue would have to file an appeal before the Supreme Court and the other party that intends challenging the other type of issue would have to file an appeal before the High Court. There could potentially be four appeals against the same order of the Tribunal- two in the High Court and two in the Supreme Court. There could potentially be four appeals against the same order of the Tribunal- two in the High Court and two in the Supreme Court. It was precisely to avoid these situations that Section 32 G was enacted. It was to avoid the bifurcation of proceedings before the Supreme Court and the High Court. 13. This would also avoid conflicting findings. A view to the contrary would lead to the possibility of an appeal against the order of the Tribunal being maintainable in certain respects before the High Court and in other respects before the Supreme Court. This could lead to considerable confusion and complication. For instance, it may well be necessary in a given case for the Supreme Court to refer to, analyse and adjudicate upon the facts in relation to an order relating to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment. It may equally be necessary for the High Court in an appeal against the same order to consider, analyse and adjudicate upon the same facts but in relation to the other questions. Although theoretically, it would be possible to bring the matter to a conclusion with consistent findings the process would be considerably cumbersome and in many cases impractical. For instance, in a given case, a party may not challenge the order of the High Court. Against the same order in the appeal before the Supreme Court, it would be possible to come to different conclusions on the facts. The party, against whom the facts have been determined, would be faced with the findings of fact by the High Court. Both the judgments would have attained finality but with inconsistent findings. This could not have been the intention of the Legislature. 14. Whether an appeal lies to the High Court under Section 35 G or to the Supreme Court under Section 35 L cannot possibly depend upon the nature or scope of the appeal that the party intends filing. A party may seek to challenge only that part of the order of the Tribunal which relates to questions other than those relating to the rate of duty of excise or the value of the goods for the purposes of assessment. Such an appeal would, absent any other questions, lie to the High Court. A party may seek to challenge only that part of the order of the Tribunal which relates to questions other than those relating to the rate of duty of excise or the value of the goods for the purposes of assessment. Such an appeal would, absent any other questions, lie to the High Court. Once it is held that an appeal against the order of the Tribunal which deals with questions that fall within the ambit of Section 35 L as well as other questions lies to the Supreme Court under Section 35 L the mere fact that the party chooses to challenge only that part of the order that falls within the ambit of Section 32 G would make no difference. In other words, it cannot be said that the party that chooses to challenge the order of the Tribunal only so far as it relates to the determination of questions falling within the ambit of 35 G must file the appeal before the High Court even though the order also deals with questions that fall within the ambit of Section 32 L. In that event, if the other party files an appeal against the order of the Tribunal on issues that fall within the ambit of Section 32 L in the Supreme Court, the very purpose of Section 32 G of bringing the appeals either before the Supreme Court or before the High Court would be defeated. It can hardly be suggested that in that case, the appeal filed under Section 32 G before the High Court ought to stand transferred to the Supreme Court. The scheme of the Act in general and Sections 32 G and 32 L in particular do not indicate such a mechanism.” 8. Section 130(1) of the Customs Act, 1962, with which we are concerned, reads as under:- “SECTION 130. Appeal to High Court. - (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 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 the purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law.” 9. The provisions of section 35G(1) of the Central Excise Act are in pari materia to section 130(1) of the Customs Act, 1962. The judgment, therefore, applies to the present case as well. 10. In the circumstances, the appeal is dismissed only on the ground that it is not maintainable.