Questions regarding the rate of duty and value of goods under customs law must be appealed to the Supreme Court, not the High Court.

Judgment :

(Judgment of the Court was delivered by N.ANAND VENKATESH, J.)

This appeal has been filed by the Commissioner of Customs under Section 130 of “the Customs Act, 1962 ” (for brevity hereinafter referred to as “the Act”), against the order passed by “the Customs, Excise and Service Tax Appellate Tribunal” (in short “CESTAT”).

2. The respondent filed 34 numbers of refund claims from September 2013 to February 2017 in respect of 209 Bills of Entry for the refund of 4% Special Additional Duty (SAD) under Notification No. 102/2007-Customs dated 14.09.2007. On scrutiny, it was found that the goods sold were different from the goods imported and hence, further investigation was done by the Special Intelligence and Investigation Branch. As per the investigation conducted, it was found that the importer had sent the imported oats to the job workers, who had undertaken three types of job work on the imported oats and thereby, the goods sold assumed a different character and therefore, the respondent did not fulfil the conditions specified in paragraph 2 of the Notification No.102/2007. Since the imported goods were not sold as such without being subjected to any further process, an Order-in-Original dated 09.05.2017 came to be passed by the Assistant Commissioner of Customs to the following effect:

“1. I hold that M/s Pepsico India Holding (P) Ltd. is not eligible to claim the refund of Rs.5,42,34,576/- being the SAD claimed by them vide their refund claims listed in the annexure to the Show Cause Notice C.No.VIII/20/112/2017- RF dated 07.02.2017 in as much as they have diverted the imported Oats for further manufacture of excisable Oats and exempted Oats products by a other manufacturers and therefore I reject the claim of refund Rs.5,42,34,576/.

2. I hold that refund claim in respect of Bills of Entry No. 3709692/04.11.2013; 3716441/05.11.2013; 4255649/03.01.2014; 2119891/03.08.2015; 2754567/29.09.2015; 2754618/29.09.2015 and 7235623/31.10.2014 are hit by period of limitation and the same are rejected in view of the discussion above.

3. I hold M/s Pepsico India Holding (P) Ltd. to be liable for imposition of penalty under section 114AA of Customs Act, 1962 and accordingly, I impose a penalty of Rs. 25,00,000/- (Rupees Twenty five lakhs only) on M/s Pepsico India Holding (P) Ltd., Gurgoan.”

3. Aggrieved by the above order, the respondent filed an appeal before the Commissioner (Appeals) and the original order was confirmed in the appeal by order dated 27.12.2017. Aggrieved by the same, the respondent filed an appeal before the CESTAT, Chennai, in Customs Appeal No.40891 of 2018. The CESTAT, on considering the grounds raised on either side, came to the conclusion that the respondent is entitled for refund and the order passed by the Assistant Commissioner and which was confirmed in appeal by the Commissioner (Appeals), came to be set aside. Aggrieved by the same, the present appeal has been filed before this Court under Section 130 of the Act.

4. When this appeal was admitted, this Court framed the following questions of law :

“i) Whether the exemption as provided under Notification No.102/2007-Cus dated 14.09.2007 can be allowed when the conditions specified therein are not fulfilled?

ii) Whether the Board's Circular No.34/2010-Customs dated 15.09.2010 is having a bearing on the conditions specified in the Notification No.102/2007-Cus dated 14.09.2007?

iii) Whether the limitation period for filing refund provided under Notification No.102/2007-Cus dated 14.09.2007 as amended vide Notification No.93/2008- Customs dated 01.08.2008 has to be interpreted strictly in view of the Constitutional Bench Judgment i