The Bombay High Court has ruled that an appeal from a CESTAT order involving the question with respect to classification of goods under the Customs Act, 1962, would lie before the Supreme Court under Section 130E of the Customs Act, since it is primarily related to determination of the rate of customs duty applicable.
The Bench, consisting of Justices K.R. Shriram and N.R. Borkar, held that to determine whether there was a short levy of customs duty under Section 28 of the Customs Act, 1962, the revenue department has to decide the classification of goods in order to ascertain the rate of customs duty to be levied, therefore an appeal involving issues relating to Section 28 of the Customs Act was maintainable only before the Supreme Court.
The revenue authority passed an order changing the classification of goods exported by the respondent Axiom Cordages, resulting in confirmation of the demand for customs duty, along with interest and penalty on the respondent. The CESTAT has quashed the order passed by the revenue authority. The Commissioner of Customs filed an appeal before the Bombay High Court against the order passed by the CESTAT.
“As regards the second re-framed substantial question of law, that would also arise only if Revenue succeeds in proving that there was erroneous classification by respondent and by virtue thereof there has been short levy or short payment of custom duty and hence penalty is payable. As regards third re-framed substantial question of law that is already the subject matter of appeal in the appeal filed by respondent before the Hon’ble Supreme Court of India,” the Court said.
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