Bombay High Court
Videocon Industries Ltd vs The Commissioner Of Customs on 25 November, 2010
Bench: J.P. Devadhar, R. M. Savant
1 CUSTOMS APPEAL NO.67 OF 2010
lgc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CUSTOMS APPEAL NO.67 OF 2010
Videocon Industries Ltd. ]
14 KM Stone, village Chitegaon ]
Taluka Pithan District Aurangabad ]... Appellant.
Versus
The Commissioner of Customs ]
Town Centre, N-5, CIDCO ]
Aurangabad-431 003, Maharashtra ]... Respondent.
Mr. V Sridharan a/w Mr.Bharat Raichandani and J Sanghvi i/by PDS Legal for the
Appellant.
Mr.Pradeep S Jetly for the Respondent.
CORAM : J P DEVADHAR AND
R M SAVANT, JJ.
DATED : 25th NOVEMBER 2010
ORAL JUDGMENT [ PER J P DEVADHAR, J]
1 Heard.
Admit on the following substantial question of law :-
"Whether on the facts and in the circumstances of the case, the
Tribunal is justified in directing the Appellant to make pre
deposit of Rs.Five Crores for entertaining the Appeal, when, in
respect of similar appeals filed by the Appellant in the past, the
Tribunal had granted full waiver of pre deposit?"
2 By consent of both the parties, the Appeal is taken up for final hearing.
3 The appellant has been regularly importing Liquid Crystal Device - Thin
Film Transistor) Modules (for short herein after referred to as "LCD-TFT"). The
appellant had claimed classification of the said LCD -TFT under the tariff head 9013 80
2 CUSTOMS APPEAL NO.67 OF 2010
10 of the Customs Tariff and had also claimed benefit of exemption under Notification
No.24/05. The Customs Authorities classified the LCD TFT imported by the appellant,
under tariff head 8529 90 90. On an appeal filed by the appellant, the Commissioner
of Customs (Appeal) upheld the classification determined by the assessing officer. On
further appeal filed by the appellant, the CESTAT, by its order dated 23.2.2009 held
that the LCD TFT imported by the appellant are classifiable under tariff head 9013 80
10 as claimed by the appellant and not under tariff head 8529 90 90 as claimed by the
Revenue. Further Appeal filed by the Revenue against the order of CESTAT dated
23.2.2009 is pending before the Apex Court.
4 The dispute in the present appeal relates to import of LCD TFT by the
appellant during the period August 2006 to April 2008. In respect of these
consignments, the Assessing Officer passed Orders in Original holding that the LCD
TFT imported by the appellant were classifiable under the tariff head 8529 90 90 of
the Customs Tariff Act, 1975. On appeal, the Commissioner of Customs (Appeal) by
his order dated 19th February 2008 upheld the order of the assessing officer. The
Assessee thereupon filed further appeals before the CESTAT along with Stay
Application. By the impugned order dated 28.06.2010 the CESTAT decline to follow
its earlier order dated 23.2.2009 in view of the changes in the Tariff Heading
introduced by the Finance Act 2006 & directed the appellant to deposit Rs.5 crores.
Challenging the aforesaid order, the present appeal is filed.
5 Mr.Jetly, the learned counsel appearing for the Revenue, raised a
preliminary objection regarding maintainability of the appeal before this Court.
According to Mr.Jetly, the appeal filed by the appellant before the CESTAT relates to
3 CUSTOMS APPEAL NO.67 OF 2010
classification/rate of duty, and therefore, any order passed in that appeal including the
order of pre-deposit would be an order made in the appeal relating to
classification/rate of duty and therefore, in view of section 130 r/w section 130E of
the Customs Act 1962, the appeal would be maintainable before the Supreme Court
and not before this Court. Mr. Jetly submitted that since the appeal against the final
order of the tribunal in a classification dispute is maintainable before the Supreme
Court, then by applying the ratio laid down by the Apex Court in the case Rajkumar
Shivhare Vs Asstt.Director, Directorate of Enforcement reported in 2010(253) ELT 3
(SC) and the decision of this Court in the case of Indoworth India Ltd. VS CESTAT,
Mumbai reported in 2010(253) ELT 364 (Bom), it must be held that the appeal
against the interlocutory order including the order of pre-deposit passed by CESTAT in
a classification dispute is also maintainable before the Apex Court.
6 We see no merit in the above contention of Mr.Jetly. The order of pre-
deposit is made on a prima facie view of the matter and the order of pre-deposit does
not, in any way, amount to determining any question having relation to rate of duty or
value of the goods. As rightly contended by Mr.Sridharan, the learned counsel
appearing for the appellant, the argument of the Revenue cannot be sustained in the
light of the decision of the Apex court in the case of Navin Chemicals Mffg & Trading
Co. Ltd. Vs. Collector of Customs reported in 1993(68) ELT 3 (SC). In that case, the
Apex Court considered similar expression namely "determination of any question
having a relation to the rate of duty of customs or to the value of goods for purposes of
assessment" contained in section 129C of the Customs Act 1962. Para 7 of the said
Judgment reads thus :-
4 CUSTOMS APPEAL NO.67 OF 2010
"7. The controversy, therefore, relates to the meaning to be given to
the expression `determination of any question having a relation to
the rate of duty of customs or to the valud of goods for purposes of
assessment'. It seems to us that the key lies in the words `for
purposes of assessment' therein. Where the appeal involves the
determination of any question that has a relation to the rate of
customs duty for the purposes of assessment that appeal must be
heard by a Special Bench. Similarly, where the appeal involves the
determination of any question that has a relation to the value of
goods for the purposes of assessment, that appeal must be heard by
a Special Bench. Cases that relate to the rate of customs duty for
the purposes of assessment and which relate to the value of goods
for the purposes of assessment are advisedly treated separately and
placed before Special Benches for decision because they, more often
than not, are of importance not only to the importers who are
parties thereto but also to many other importers who import or
propose to import the same or similar goods. Since the decisions of
CEGAT in such matters would have wide application they are, by the
terms of the statute, to be rendered by Special Benches. The phrase
"relation to" is, ordinarily, of wide import but, in the context of its
use in the said expression in Section 129C, it must be read as
meaning a direct and proximate relationship to the rate of duty and
to the value of goods for the purposes of assessment"
7 Applying the ratio laid down by the Apex Court in the aforesaid case, in
our opinion, the pre-deposit order passed by CESTAT cannot be said to have direct and
proximate relationship to the rate of duty/to the value of goods. The expression
`determination' means decision on merits. Pre-deposit order does not decide any
question having a relation to the rate of duty or value of goods as contemplated under
Sections 130 or 130E of the Customs Act, 1962. Therefore, appeal against an order of
pre-deposit passed by the Appellate Tribunal would be maintainable before the High
Court. Under Section 130 of the Customs Act, 1962, appeal against all orders of the
Tribunal except orders determining the question relating to determination of rate of
duty or value of goods are maintainable before the High Court. Therefore, the fact
that the appeal under Section 130E of the Customs Act, 1962 against the order,
determining the rate of duty or value of goods is maintainable before the Apex Court,
5 CUSTOMS APPEAL NO.67 OF 2010
cannot be a ground to hold that the appeal against the order of pre-deposit would also
be maintainable before the Apex Court.
8 The decision of the Apex Court in the case of Rajkumar Shivhare (supra)
and the decision of this Court in the case of Indoworth India Ltd. (supra) on which
strong reliance was placed by Mr.Jetly, are distinguishable on facts. In the case of
Rajkumar Shivhare (supra) the question was, whether a party aggrieved by an interim
order passed by the Appellate Tribunal under the Foreign Exchange Management Act,
1999 can file an appeal before the High Court under Section 35 of the Foreign
Exchange Management Act, 1999 or not. The Apex Court, held that under Section 35
of the Foreign Exchange Management Act, appeal is maintainable before the High
Court even against the interlocutory order. It is relevant to note that Section 35 of the
Foreign Exchange Management Act 1999 does not provide for any exclusion whereas
Section 130 of the Customs Act 1962 provides that appeals against certain orders
would not be maintainable before the High Court. Therefore, the decision of the Apex
Court in the case of Rajkumar Shivhare (supra) relating to Section 35 of the Foreign
Exchange Management Act, 1999 would have no relevance in the present case.
Similarly, the decision of this Court in the case of Indoworth India Ltd (supra) would
have no relevance to the facts of the present case. In these circumstances, in our
opinion, the order of pre-deposit passed by the Tribunal cannot be said to be
`determination of any question having a relation to the rate of duty of customs or to
the value of goods' so as to bar jurisdiction of this Court to entertain the appeal
against the order of pre-deposit under Section 130 of the Customs Act, 1962.
Accordingly, we reject the preliminary objection raised by the Revenue regarding the
maintainability of the appeal before this Court.
6 CUSTOMS APPEAL NO.67 OF 2010
9 Now turning to the merits of the appeal, the question to be considered is
whether the Tribunal is justified in ordering pre-deposit in spite of the fact that the
classification of LCD-TFT has already been determined by the Tribunal by its order
dated 23/2/2009. The only reason given by the Tribunal for not following its earlier
order is that there is some amendment in the Tariff Entry 8528 by Finance Act, 2006.
Perusal of the adjudication order shows that the classification of the imported LCD-TFT
is not based on the amendment introduced by Finance Act, 2006. In fact it is the
specific case of the Revenue that prior to amendment as well as subsequent to the
amendment introduced by the Finance Act, 2006, the LCD-TFT imported by the
appellant are classifiable under tariff head 8529 90.90. Tariff Heading 8528, 8529 and
9013 to the extent relevant prior to and subsequent to the amendment introduced by
the Finance Act, 2006 read thus :-
CUSTOMS TARIFF ACT 1995 (PRIOR TO 2006)
Chapter 85 Electrical/electronic machinery & Equipment 1010
8528 Reception apparatus for television, whether or not
Incorporating radio- broadcast, receivers or sound
or Video recording or reproducing apparatus,
video monitors and video projectors
8528 12 18 Liquid crystal display television set of screen size U 12.5%
below 63 cm
8528 13 Black and white or other monochrome
8528 13 10 Liquid crystal display television set of screen size U 12.5%
below 25 cm
8529 Parts suitable for use solely or principally with the
apparatus of headings 8525 to 8528
8529 90 90 Other Kg 12.5%
Chapter 90 Photographic, medical, measuring & etc
instruments
7 CUSTOMS APPEAL NO.67 OF 2010
9013 Liquid crystal device not constituting articles
provided for more specifically in other headings,
lasers, other than laser, diodes, other optical
appliances and instruments, not specified or
included else where in this chapter.
9013 80 10 Liquid Crystal device (LCD) U Free
CUSTOMS TARIFF ACT, 1995 (SUBSEQUENT TO 2006)
Chapter 85 Electrical/electronic machinery & equipment
8528 Monitors and projectors, not incorporating
television reception apparatus; reception
apparatus for television, whether or not
incorporating radiobroadcast receivers or
sound or video recording or re-producing
apparatus
1528 7218 Liquid crystal display television set of screen U 10%
size below 63 cm
85287310 Liquid crystal display television set of screen u 10%
size below
25 cm
8529 Parts suitable use solely or principally with
the apparatus of headings 8525 to 8528
8529 9090 Other kg 10%
9013 Liquid crystal devices not constituting articles
provided for more specifically in other
headings, lasers, other than laser diodes,
other optical appliances and instruments, not
specified or included else where in this
chapter
9013 80 10 Liquid crystal devices (LCD) u Free
10 Perusal of the aforesaid Tariff Headings clearly show that the changes
introduced by Finance Act, 2006 are in respect of Tariff Heading 8528 and not in Tariff
Heading 8529 which according to the revenue is the relevant Tariff Heading in the
present case. As noted earlier, the contention of the revenue that LCD-TFT imported by
the appellant in the past were classifiable under Tariff Heading 8529 90 90 has already
been rejected by the Tribunal. It is interesting to note that currently, clearance of LCD-
8 CUSTOMS APPEAL NO.67 OF 2010
TFT imported by the appellant is allowed on provisional basis under Tariff Heading
9013 80 10 as claimed by the appellant on execution of bond without any bank
guarantee.
11 In these circumstances, in our opinion, the tribunal was not justified in
directing pre-deposit when the classification of the goods in question stands concluded
in favour of the assessee and it is not even the case of the revenue that the amendment
introduced by Finance Act, 2006 is applicable in the present case. In the result, we set
aside the order of the CESTAT dated 30th June 2010 and direct the CESTAT to hear the
appeal on merits without insisting any pre-deposit. We make it clear that the Tribunal
shall dispose of the appeal on its own merit without being influenced by this order.
This Appeal is accordingly disposed of with no order as to costs.
[R.M.SAVANT, J] [J P DEVADHAR, J]
