October 5, 2025

LAW DHARMA

Your Legal Destination

An appeal from the order of Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”), involving an issue regarding violation of conditions contained in customs exemption notification, would lie only before the High Court under the provisions of Section 130 of the Customs Act, 1962 not before the Supreme Court under the provisions of Section 130E of the Customs Act.

M/s.Motorola India Limited imported materials to India for the purpose of manufacturing Pagers. It claims benefit under a Notification No. 30/1997– Customs dated 01.04.1997  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.

Later on, M/s.Motorola had stopped the manufacturing of Pagers and the remaining imported materials have been obsolete.  However, the Commissioner of Customs after issuance of show cause notice, passed an order of demand thereby levying the customs duty along with interest and penalty. This order was challenged before CESTAT by way of Appeal. The appeal was allowed by CESTAT. As against, the Department preferred appeal before the High Court under section 130 of Customs Act. The Assessee raised an issue that the appeal should lie only before the Supreme Court as against the order CESTAT under section 130E of the Act as the issue relates to levy of duty. The High Court accepted the contention of the Assessee and dismissed the appeal. The above order of High Court challenged before the Hon’ble Supreme Court of India.

After hearing, the Supreme Court clearly held that “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 Assessee  as a whole. The question is purely inter-se between the parties and is required to be adjudicated upon the facts available.” So, the Supreme Court held that the appeal would lie only under section 130 of the Act and not under section 130E of the Customs Act.

The Supreme Court further clarified by referring its earlier judgments and the circumstances wherein appeal would lie directly to the Supreme Court. It held that “ 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 this court.

(i) determination 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.“Thus, only under the above circumstances alone, Appeal against the order of CESTAT would lie before the Apex Court under section 130E of the Customs Act.