The main legal point established in the judgment is that the dispute concerning an exemption cannot be equated with a dispute in relation to the rate of duty, and the appeal was found to be maintainable before the High Court under Section 130 of the Act.

ORDER

1. Feeling aggrieved and dissatisfied with the impugned order dated 17.12.2021 passed by the High Court of Kerala at Ernakulam in Customs Appeal No. 1 of 2021 by which the High Court has overruled the objection raised by the petitioner herein - assessee on the maintainability of the appeal before the High Court under Section 130(1) of the Customs Act, 1962 (hereinafter referred to as 'the Act'), the original assessee - respondent before the High Court has preferred the present Special Leave Petition.

1.1 That the petitioner herein operates the cableship CS Asean Explorer ("vessel AE") for the purposes of laying, repairs and maintenance of submarine cables. Various telecommunication companies entered into an agreement with cableship operators (including the petitioner herein) to undertake repair and maintenance of the submarine cable wires through cableships such as the vessel AE. That the vessel AE is stationed at Kochi, India, to undertake repairs and maintenance of submarine cables.

1.2 A show cause notice dated 10.07.2012 along with corrigendum dated 14.08.2012 was issued proposing to initiate action under Sections 111 (b) and (f) of the Act read with Section 125 of the Act. The petitioner resisted the same. It was the case on behalf of the petitioner that CS Asean Explorer, which was subjected to a confiscation order, is a foreign-going vessel falling within the definition of Section 2(21) and Section 87 of the Act and therefore entitled to exemption from payment of any duty under the Act, as CS Asean Explorer is a foreign-going vessel. Thus, as such the petitioner claimed the exemption from payment of duty under Section 87 of the Act. It was the case on behalf of the petitioner that as petitioner is not answerable to any duty leviable under the Act and therefore, no assessment is required for the purpose of determining the amount payable by it. That the Commissioner of Customs confirmed the demand vide order dated 04.04.2013 and also imposed the penalty.

1.3 Petitioner aggrieved by the order dated 04.04.2013 filed an appeal before the CESTAT, South Zonal Bench, Bangalore being Customs Appeal No. 27102 of 2013. The CESTAT allowed the said appeal and remanded the appeal for determining the extent of applicable duty on the ship's stores consumed by the petitioner during the period of time that the vessel was engaged in operations in Indian territorial waters and for the normal period. Thus, the CESTAT accepted the case on behalf of the petitioner that vessel AE is a foreign going vessel and Section 87 of the Act is attracted to stores consumption on board and therefore the petitioner is exempted from payment of duty as per Section 87 of the Act.

1.4 Aggrieved by the final order passed by the CESTAT dated 18.02.2020 in holding that vessel AE is a foreign-going vessel and therefore Section 87 of the Act shall be attracted to store consumption on board and therefore the applicant petitioner is exempted from payment of the customs duty, the Revenue has preferred the further appeal before the High Court under Section 130(1) of the Act.

1.5 A preliminary objection was raised on behalf of the petitioner on the maintainability of the appeal before the High court under Section 130(1) of the Act. It was the case on behalf of the petitioner that as the principal question is determination of rate of duty, against the order passed by the CESTAT, Appeal under Section 130E(b) shall be maintainable to the Hon'ble Supreme Court. By the impugned order the High Court has overruled the said objection on the maintainability of the appeal before the High Court against the order passed by the CESTAT by holding that the principal question in the present case is, not in relation to the rate of duty but determining whether, vessel AE, is a foreign-going vessel or not and if the vessel AE is a foreign-going vessel, whether Section 87 of the Act would be applicable or not. Thus, according to the High Court, the principal question is not the determinati