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 3 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, 4 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.

(iv) The Tribunal had acted in gross violation of the procedure or principles of natural justice occa- sioning a failure of justice.

22. The above parameters, which by no means should be considered to be exhaustive, may now be applied to the case of the parties before us to decide the pri- mary question indicated at the outset of the present or- der, namely, whether this appeal deserves to be admit- ted.“

“(i) determination of a question relating to a rate of duty;

(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;

19. In the result, the appeals are allowed and the impugned orders passed by the High Court are set aside. The appeals are remitted back to the High Court for de novo consideration of the appeals on their own merits.

20. In the facts and circumstances of the case, there shall be no order as to costs.

SEPTEMBER 5, 2019.