Case: COMMISSIONER OF CUSTOMS, BANGALORE I Vs. M/S MOTOROLA INDIA LTD

3. The facts in the present matter are not in dispute. For the sake of convenience, we would refer to the facts in Civil Appeal No. 10083/2011, inasmuch as the impugned judgment and order(s) in all other connected appeals are passed following the judgment and order passed by the Karnataka High Court in CS TA No. 2/2007.4. The assessee is a leading manufacturer of pagers. The assessee is entitled to the benefit of Notification No. 30/1997– Customs dated 01.04.1997 (hereinafter referred as the said ?notification?) by which the materials imported into India for the manufacturing of the pagers were exempted from whole of the customs duty leviable in the First Schedule of the Customs Tariff Act, 1975 and further whole of the additional duty leviable thereon under Section 3 of Customs Tariff Act, 1975. As per the scheme framed under the said notification, the goods imported under the actual user condition were required to be used only for the manufacture of the declared final product. A specific intelligence was received by the Director of Revenue Intelligence to the effect that the assessee had stopped manufacturing of pagers and hence a certain portion of the duty free material imported under the Scheme had been written off in their books of accounts. The officers of the DRI, therefore, took up further investigation in the matter. The assessee was called upon to submit the list of such unutilized items, which are imported under the said notification and lying unutilized. The assessee submitted a list of such unutilized items with requisite details and sought for further time to link unutilized items to the bill of entry at the relevant assessable value. It was further informed by the assessee that they have ceased to manufacture pagers and as such materials have become obsolete insofar as they are concerned.5. Not satisfied with the contention of the assessee, the Commissioner of Customs, Bangalore, issued a Notice to the assessee, calling upon it to show cause as to why the customs duty amounting to Rs. 96,17,498/- along with interest at the rate of 24% per annum and the penalty should not be recovered from it. After following the procedure prescribed, the Commissioner of Customs passed an Order in Original on 30.04.2002 thereby, holding that the assessee was liable to pay the aforesaid amount of Rs. 96,17,498/- along with interest and penalty. Being aggrieved thereby, the assessee preferred an appeal before the CESTAT. The CESTAT allowed the appeal. Being aggrieved thereby, the Commissioner of Customs, Bangalore preferred an appeal before the Karnataka High Court under the provisions of Section 130 of the Customs Act. At the stage of final hearing of the appeal, the assessee raised a preliminary objection contending therein, that the order impugned before the High Court amongst other things, also relates to the rate of duty of customs and as such the appeal under Section 130 of the Customs Act was not tenable before the High Court and the appeal will have to be preferred before this Court under the provisions of Section 130E of the Customs Act.6. The Division Bench of the High Court held that it was called upon to decide whether the terms and conditions of the said notification have been complied with by the assessee or not and whether the levy of duty, interest and penalty were legal or not and whether the CESTAT was justified in setting aside the levy of duty, interest and penalty and all these questions were related to determination of the rate of duty. The Division Bench of the High Court, therefore, held that the appeal under Section 130 of the Customs Act was not tenable before the High Court but would be tenable under Section 130E of the Customs Act before this Court. Being aggrieved thereby, the Revenue is in appeal before this Court.

Reasoning: 9. Upon a conjoint reading of the aforesaid provisions, it could thus be seen that an appeal shall lie to the High Court against every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. The only exception carved out is that an appeal shall lie before this Court and shall not lie before the High Court against the order relating, amongst other things, to the determination of any question having relation to the rate of duty of customs or to the value of goods for the purposes of assessment.10. It could thus clearly be seen that, only if any question having relation to the rate of duty is involved in an appeal or if it relates to value of goods for the purpose of assessment, the appeal would lie to this Court and in all other cases it would lie before the High Court.It could thus clearly be seen that, this Court, while considering the provisions of Section 130 and Section 130E of the Customs Act, has held that where an appeal involves determination of any question that has relation to customs duty for the purpose of assessment or where an appeal involves determination of any question that has relation to the value of goods for the purposes of assessment, such cases will have to be treated separately and have to be given special treatment.It could thus be seen that, this Court has found that when an order of the Appellate Tribunal would go beyond inter se disputes between the parties and may affect a large number of cases, such an issue will be one of general public importance. It has further been found that certain questions raised or arising may require interpretation of the Constitution. It is held that only such questions of general public importance alone are required to be decided by this Court. It has further been held that, by the very nature of a question raised or arising, the same necessarily has to involve issue of law going beyond the inter partes rights and extending to a class or category of assessees as a whole.We are of the considered view that the Legislature has carved out only following categories of cases to which it has intended to give a special treatment of providing an appeal directly to thisdetermination of a question relating to a rate of duty;(ii) determination of a question relating to the valuation of goods for the purpose of assessment;(iii) determination of a question relating to the classification of goods under the Tariff and whether or not they are covered by an exemption notification;(iv) whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for.Reverting to the present case, it could clearly be seen that the only question that is involved is whether the assessee had violated the conditions of the exemption notification by not utilizing the imported materials for manufacturing of the declared final product and was, therefore, liable for payment of duty, interest and penalty. Neither any question with regard to determination of rate of duty arises nor a question relating to valuation of goods for the purposes of assessment arises in the present case. The appeals also do not involve determination of any question relating to the classification of goods, nor do they involve the question as to whether they are covered by the exemption notification or not. Undisputedly, the goods are covered by the said notification. The only question is as to whether the assessee has breached the conditions which are imposed by the notification for getting exemption from payment of the customs duty or not. The appeals do not involve any question of law of general public importance which would be applicable to a class or category of assessees as a whole. The question is purely inter-se between the parties and is required to be adjudicated upon the facts available.18. In that view of the matter, we find that the High Court was not justified in holding that the appeals are not maintainable under Section 130 of the Customs Act but are tenable before this Court under Section 130E of the Customs Act.