[Cites 12, Cited by 0]
Madras High Court
The Commissioner Of Customs vs J.M.Baxi And Co on 12 March, 2026
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
C.M.A(MD)Nos.1012 and 1013 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 12.03.2026
CORAM:
THE HON'BLE MR JUSTICE N.ANAND VENKATESH
AND
THE HON'BLE MR JUSTICE P.DHANABAL
C.M.A(MD)Nos.1012 and 1013 of 2021
and
CMP (MD) Nos.9390 and 9391 of 2021
C.M.A(MD)No.1012 of 2021
The Commissioner of Customs
Custom House,
New Harbour Estate,
Turicorin – 628 004. ... Appellant/Respondent
Vs.
J.M.Baxi and Co.,
No.4 and 4a, Clive Battery Complex,
Rajaji Salai, Parrys,
Chennai - 60001. ... Respondent/Appellant
PRAYER:- Civil Miscellaneous Appeal is filed under Section 130 of
the Customs Act 1962, to set aside the Final order No.
1/16
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C.M.A(MD)Nos.1012 and 1013 of 2021
41249-41250/2020 dated 18.11.2020 on the file of the Customs,
Central Excise and Service Tax Appellate Tribunal, South Zone,
Chennai.
C.M.A(MD)No.1013 of 2021
The Commissioner of Customs
Custom House,
New Harbour Estate,
Turicorin – 628 004. ... Appellant/Respondent
Vs.
Jan De Nul Dredging India Pvt. Ltd.,
Door No. 7, Flat No. 7, C.I.T. Colony,
Vijay Deluxe Apartments,
Mylapore,
Chennai - 600004. ... Respondent/Appellant
PRAYER:- Civil Miscellaneous Appeal is filed under Section 130 of
the Customs Act 1962, to set aside the Final order No.
41249-41250/2020 dated 18.11.2020 on the file of the Customs,
Central Excise and Service Tax Appellate Tribunal, South Zone,
Chennai
For Appellant : Mr.R.Gowri Shankar (in both CMAs)
For Respondent : Mr.Haris Bindhumadhavan
(in both CMAs)
2/16
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C.M.A(MD)Nos.1012 and 1013 of 2021
COMMON JUDGMENT
(Judgment of the Court was delivered by
N.ANAND VENKATESH, J.)
These appeals have been filed by the Commissioner of
Customs against the common final order passed by “the Customs, Excise
and Service Tax Appellate Tribunal, Chennai” (in short “CESTAT”) dated
18.11.2020.
2. The respondent in CMA (MD) No.1013 of 2021 imported
used self-propelled workboat and classified the same under CTH
89019000 and availed exemption in excess of 15% of applicable duties
under Notification No.27/2002-CUS as amended. The importer took the
stand that the workboat falls under CTI 890190000 and whereas the
department proposed reclassification under CTI 89059090.
3. The show-cause notice came to be issued after a DRI
investigation on the ground of wrong classification and the exemption of
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C.M.A(MD)Nos.1012 and 1013 of 2021
15% availed under Notification No. 27/2002-CUS dated 01.03.2002.
The respondent in CMA(MD) No.1012 of 2021 is the customs broker
who was involved in the export of the vessel. Therefore, show-cause
notice was issued to them also.
4. The case was adjudicated for misclassification and non-
compliance of the re-export of the vessel within six months as provided
under the exemption notification.
5. The Commissioner of Customs, Tuticorin, vide Order-in-
Original dated 19.11.2012, directed payment of penalty, interest etc.
Aggrieved by the same, the respondent filed appeal before the CESTAT,
Chennai. The CESTAT through a common order dated 18.11.2020
allowed the appeals filed by the respondents. Aggrieved by the same, the
present appeals have been filed before this Court.
6. Notice was ordered in these appeals and no substantial
question of law was framed at the time of ordering notice.
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C.M.A(MD)Nos.1012 and 1013 of 2021
7. When the matter was taken up for hearing today, this Court
entertained a doubt as to whether the present appeals are maintainable
before this Court under Section 130 of “the Customs Act, 1962” (for
brevity hereinafter referred to as “the Act”), since it involved claiming
exemption under Notification dated 01.03.2002 which is directly or
proximately relating to the rate of duty applicable for the purposes of
assessment.
8. This Court heard the counsel appearing on either side and
carefully went through the materials available on record.
9. In the case in hand, there was a dispute regarding the
classification as well as availing exemption of applicable duties in excess
of 15% under the exemption Notification No.27/2002-CUS dated
01.03.2002.
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C.M.A(MD)Nos.1012 and 1013 of 2021
10. It will be relevant to take note of the judgment of the Apex
Court in Navin Chemicals Mfg. and Trading Co. Ltd. v. Collector of
Customs, reported in 1993 (68) ELT 3 and the relevant portions are
extracted hereunder:
“8. Before we consider whether the case of the appellant
fails within the said expression, we must note that Section
130, Sub-section (l) and Section 130-E, Clause (b) of the
said Act also use the said expression and they refer
respectively to the Statement of Case to the High Court on a
reference by CEGAT and an appeal to the Supreme Court
directly. Section 130(1) states that the Collector of Customs
or the other party may require CEGAT to refer to the High
Court any question of law arising out of an order under
appeal before it provided it is not an order relating among
other things to the 'determination of any question having a
relation to the rate of duty of customs or to the value of
goods for purposes of assessment'. Clause (b) of Section
130E provides that an appeal shall lie to the Supreme Court
from 'any order passed by the Appellate Tribunal relating,
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C.M.A(MD)Nos.1012 and 1013 of 2021
among other things, to the determination of any question
having a relation to the rate, of duty of customs or to the
value of goods for purposes of assessment'.
9. The importance of the present appeal lies not so much
in deciding which appeals can be heard by a member of
CEGAT sitting singly and which by a Special Bench thereof
as in determining where a reference can be made by CEGAT
to the High Court and in which cases an appeal against an
order of CEGAT can be filed directly before the Supreme
Court. Where an appeal lies to the Supreme Court, the
necessity of the reference on a question of law to the High
Court is obviated. An appeal to this Court is provided
where, as aforementioned, the questions in issue, relating to
the rates of duty or the value of goods for the purposes of
assessment, have relevance not only for the parties there
c6ncerned but for other importers as well.
10. Section 129D deals with the powers of the Central
Board of Excise and Customs and the Collector of Customs
to call for and examine the record of any proceedings before
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C.M.A(MD)Nos.1012 and 1013 of 2021
authorities subordinate thereto and examine the legality or
propriety thereof and also to direct such authorities to file
appeals. Sub-section 5 was added to Section 129-D by the
Customs & Central Excise Laws Amendment Act, 1988 and
it reads thus:
“(5) The provisions of this section shall not apply to any
decision or order in which the determination of any question
having a relation to the rate of duty or to the value of goods
for the purposes of assessment of any duty is in issue or is
one of the points in issue.
Explanation - For the purposes of this sub-
section, the determination of a rate of duty in relation to any
goods or valuation of any goods or valuation of any goods
for the purposes of assessment of duty includes the
determination of a question.-
(a) relating to the rate of duty for the time being
in force, whether under the Customs Tariff Act, 1975 (51 of
1975), or under any other Central Act providing for the levy
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C.M.A(MD)Nos.1012 and 1013 of 2021
and collection of any duty of customs, in relation to any
goods on or after the 28th day of February, 1986; or
(b) relating to the value of goods for the purposes
of assessment of any duty in cases where the assessment is
made on or after the 28th day of February, 1986; or
(c) whether any goods fall under a particular
heading or sub-heading of the First Schedule or the Second
Schedule to the Customs Tariff Act, 1975 (51 of 1975), or
that any goods are or not covered by a particular notification
or order issued by the Central Government granting total or
partial exemption from duty; or
(d) whether the value of any goods for the
purposes of assessment of duty shall be enhanced or
reduced by the addition or reduction of the amounts in
respect of such matters as are specifically provided in this
Act.
11. It will be seen that Sub-section (5) uses the said
expression 'determination of any question having a relation
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C.M.A(MD)Nos.1012 and 1013 of 2021
to the rate of duty or to the value of goods for the purposes
of assessment' and the Explanation thereto provides a
definition of it 'for the purposes of this sub-section'. The
Explanation says that the expression includes the
determination of a question relating to the rate of duty; to
the valuation of goods for purposes of assessment; to the
classification of goods under the Tariff and whether or not
they are covered by an exemption notification; and 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. Although this Explanation
expressly confines the definition of the said expression to
Sub-section 5 of Section 129-D, it is proper that the said
expression used in the other parts of the said Act should be
interpreted similarly. The statutory definition accords with
the meaning we have, given to the said expression above.
Questions relating to the rate of duty and to the value of
goods for purposes of assessment are questions that squarely
fall within the meaning of the said expression. A dispute as
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C.M.A(MD)Nos.1012 and 1013 of 2021
to the classification of goods and as to whether or not they
are covered by an exemption notification relates directly and
proximately to the rate of duty applicable thereto for
purposes of assessment. Whether the value of goods for
purposes of assessment is required to be increased or
decreased is a question that relates directly and proximately
to the value of goods for purposes of assessment. The
statutory definition of the said expression indicates that it
has to be read to limit its application to cases where, for the
purposes of assessment, questions arise directly and
proximately as to the rate of duty or the value of the goods.
12. This, then, is the test for the purposes of determining
whether or not an appeal should be heard by a Special
Bench of CEGAT, whether or not a reference by CEGAT
lies to the High Court and whether or not an appeal lies
directly to the Supreme Court from a decision of CEGAT :
does the question that requires determination have a direct
and proximate relation, for the purposes of assessment, to
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C.M.A(MD)Nos.1012 and 1013 of 2021
the rate of duty applicable to the goods or to the value of the
goods.”
11. The above judgment of the Apex Court brings out the
distinction between Section 130 and Section 130E of the Act which
provides for appeal to the High Court and to the Supreme Court from the
order passed by the CESTAT. In a case which involves determination of
any question having relation to the rate of duty of customs or to the value
of goods for the purposes of assessment, such appeal can be filed only
before the Supreme Court. The above judgment also gives a clarity where
the subject matter of challenge touches upon an exemption notification
and if that exemption notification relates directly or proximately to the
rate of duty applicable for the purposes of assessment and that will also
fall within the ambit of Section 130E of the Act and consequently, the
appeal would lie only before the Supreme Court.
12. The above judgment of the Apex Court has been
subsequently followed in various judgments and it will suffice to take
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C.M.A(MD)Nos.1012 and 1013 of 2021
note of those judgments hereunder:
1. Steel Authority of India Ltd. v. Designated Authority, Directorate
General of Anti- Dumping & Allied Duties [2017 (349) E.L.T. 193
(S.C.)
2. Commissioner of Customs, Bangalore - 1 v. Motorola India Ltd.
[2019 (368) E.L.T. 3 (S.C.)]
3. Maruti Udyog Ltd. v. Commr. Of Cus., Chennai [2019 (369) E.L.T.
354 (Mad.)]
4. Commissioner of C. Ex., Chennai Vadapalani Press [2015 (320)
E.L.T. 238 (Mad.)]
5. Coimbatore Polytex Ltd. v. CESTAT, Chennai [2015 (319) E.L.T.
293 (Mad.)]
6. Commissioner of Customs (Exports), Chennai v. D. S. Metal (P)
Ltd. [2015 (323) E.L.T. 328 (Mad.)]
7. Commr. of Cus., C. Ex. & Service Tax v. Jubilant Life Sciences
Ltd. [2014 (306) E.L.T. 212 (All.)]
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C.M.A(MD)Nos.1012 and 1013 of 2021
13. In the case in hand, apart from the misclassification, the
respondents have also availed exemption under the notification and
thereby 15% of the aggregate duty payable has not been paid. Even
though classification of goods will not come within the purview of Sub-
section (1) of Section 130 and Clause (b) of Section 130E, there is
definitely an element of rate of duty of customs which is relatable to the
exemption notification and which was availed by the respondents to the
tune of 15% of the aggregate duty payable. Therefore, if among other
things, the issue also involves determination of any question having
relation to the rate of duty of customs, the appeal will lie only before the
Supreme Court under Section 130E of the Act. Thus, the challenge made
to the order passed by the CESTAT is maintainable only before the
Supreme Court and not before this Court.
14. In the light of the above discussion, these appeals are
closed and it is left open to the department to file an appeal before the
Supreme Court, if so advised and proceed further in accordance with law.
Consequently, connected miscellaneous petitions are closed.
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C.M.A(MD)Nos.1012 and 1013 of 2021
15. The Registry is directed to return the original orders passed
by the CESTAT, Chennai, to the learned Standing Counsel for the
department, to enable the department to file an appeal before the Apex
Court.
[N.A.V., J.] [P.D.B., J.]
12.03.2026
NCC :Yes/No
Index :Yes/No
PKN
To
1.The Commissioner of Customs
Custom House,
New Harbour Estate,
Turicorin – 628 004.
2.The Customs, Excise and Service Tax Appellate Tribunal,
South Zone, Chennai.
3.The Record Keeper (Vernacular Records),
Madurai Bench of Madras High Court,
Madurai.
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C.M.A(MD)Nos.1012 and 1013 of 2021
N. ANAND VENKATESH,J.
AND
P.DHANABAL,J.
PKN
C.M.A(MD)Nos.1012 and 1013 of 2021
12.03.2026
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