IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN TUESDAY, THE 15TH JUNE 2010 / 25TH JYAISTHA 1932 C.E.Appeal.No. 32 of 2009() --------------------------- AGAINST THE ORDER DATED 21/04/2009 IN FO 227/2009 IN A.465/2008 of CUSTOMS,EXCISE&SERVICE TAX APP.TRIBUNAL,BANGALORE .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF CENTRAL EXCISE, CALICUT. BY ADV. SRI.JOHN VARGHESE,SC,CEN.BOARD OF EXCIS RESPONDENT(S): APPELLANT ------------------------ M/S.PREMIER FOOTWEAR PRODUCTS (P) LTD., ADMINISTRATIVE OFFICE, CALICUT-673 002. (REPRESENTED BY MANAGING DIRECTOR, SHRI.M.JOY VARGHESE, "JOGI", CHALAPPURAM, KOZHIKODE). ADV. SRI.CHACKO GEORGE, SENIOR ADVOCATE FOR R1 SRI.H.RAMANAN FOR R1 SRI.ALEX N.MATHEW (KOLLAM) FOR R1 SRI.JAMES JOSE FOR R1 THIS CENTRAL EXICISE APPEAL HAVING BEEN FINALLY HEARD ON 15/06/2010, ALONG WITH CEA NOS. 31 & 33/2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.R. C .N. RAMACHANDRAN NAIR, & P.S. GOPINATHAN, JJ. -------------------------------------------- C.E. A. Nos. 32, 31 & 33 of 2009 -------------------------------------------- Dated this the 15th day of June, 2010 JUDGMENT Ramachandran Nair, J. These are Appeals filed by the department against the orders of the Customs, Excise & Service Tax Appellate Tribunal cancelling adjudication orders demanding duty and penalty for the inputs manufactured and cleared by the related respondent-industries to contract units for manufacture of hawai chappals. Standing counsel appearing for the appellant referred to us to notification No. 67/95 dated 16.3.1995 (Annexure A2) and notification No. 10/1996 dated 23.7.1996 (Annexure A1) and contended that respondents are not entitled to claim duty exemption on inputs cleared to the contract units for manufacture of hawai chappals because the basic condition in the above notifications that final product should be manufactured within the factory premises is not satisfied. The adjudicating authority found the respondents ineligible for the benefit and levied duty and penalty. CEA NOS. 32,31 &33/2009 2 The first round of appeals before the Tribunal ended up in a remand. Even though duty and fine are reimposed in fresh adjudication proceedings, the Tribunal vide impugned orders cancelled the same holding that respondents were entitled to exemption. It is against the common order of the Tribunal, these appeals are filed. 2. During hearing counsel appearing for the respondents submitted that appeals are not maintainable under Section 35G of the Central Excise Act because along with duty exemption another question arising is in relation to classification and rate of duty on inputs. Even though counsel for the appellant pointed out that the main question is respondent's eligibility for exemption under the notifications above referred, which can be decided in appeals by us, we notice that subsidiary issue is equally important because if respondents are not entitled to duty exemption then question arises as to classification of the inputs and rate of duty applicable to such items, which are seen decided by the adjudicating authority as well as the Tribunal. Sections 35G and 35L make it very clear that High Court has no jurisdiction to entertain an appeal against the order of the Tribunal CEA NOS. 32,31 &33/2009 3 where at least one of the issues raised pertains to rate of duty of goods or classification or valuation of goods. Since classification is an incidental issue, we feel the objection raised by respondent is tenable. Even though we notice that Tribunal has not considered exemption claim based on condition in the notifications, that is whether manufacture of final product through contract units entitles assessees for exemption under the notifications, still we are constrained to reject the appeals as not maintainable in the High Court because classification is one of the issues decided by the Tribunal. Consequently we hold that appeals are not maintainable and we reject the appeals. Registry is directed to return the original of the orders impugned in the appeals for the appellants to file appeal or SLP before the Supreme Court. (C.N.RAMACHANDRAN NAIR) Judge. (P.S. GOPINATHAN) Judge. kk CEA NOS. 32,31 &33/2009 4