M/S. BANS INTERNATIONAL v. PRINCIPAL COMMISSIONER OF CUSTOMS (IMPORT) & ANR

1. The petitioner filed the above captioned appeal as a writ petition being W.P.(C) No.12910/2023. The said petition was listed before this Court on 03.10.2023 and on the said date, the learned counsel for the petitioner sought the liberty to convert the petition into a statutory appeal.

2. Pursuant to the said liberty, the petition was renumbered as the present appeal. However, the petitioner did not take any steps for RAWAL appropriately converting the said petition into the appeal; the appellant has applied only for the change of nomenclature of the writ petition and renumbered as an appeal.

3. The petitioner, essentially, seeks to assail the common order dated 03.04.2023 passed by the learned Customs, Excise and Service Tax Appellate Tribunal (hereafter the learned CESTAT) in Customs Appeal No.51682/2021; Customs Appeal No.51685/2021; and Customs Appeal No.51794/2022. Essentially, the petitioner is aggrieved by the classification of the goods imported by it.

4. According to the petitioner, the goods described as “trigger spray for plastic bottles, lotion pump for plastic bottle and fine mist spray for plastic bottle” fall under CTH 8424, which is extracted below:- 8424 Mechanical Appliances (Whether or Not Handoperated) for projecting, dispersing or spraying liquids or powders; fire extinguishers, whether or not charged; spray guns and similar appliances; steam or sand blasting machines and similar jet projecting machines 8424 10 00 -Fire extinguishers whether or not charged ʮ 7.5% 8424 20 00 -Spray guns and similar appliances ʮ 7.5% 8424 90 00 Parts Kg 7.5%

5. According to the Revenue, the said goods fall in CTH 9616, which is set out below:- RAWAL 9616 Scents sprays and similar toilet sprays, and mounts and heads therefor; powderpuffs and pads for the application of cosmetics or toilet preparations 9616 10 -Scent sprays and similar toilet sprays and mounts and heads therefor; 9616 10 10 ---Scents sprays and similar toilet sprays kg 20% 9616 10 20 ---Mounts and Heads kg 20%

6. Mr Singla, learned counsel appearing for the Revenue submits that the issue is, essentially, as to the rate of the tax, and therefore, the appeal against the impugned order passed by the learned CESTAT would lie with the Supreme Court under Section 130E of the Customs Act, 1962. He referred to the decision of the Division Bench of this Court in The Commissioner of Customs (Export) v. M/s. Sipca India Ltd. & Ors.[1] wherein this Court had considered the decisions in the case of Commissioner of Service Tax v. Ernst & Young Private Limited[2] and Naveen Chemicals Manufacturing and Trading Company Limited v. Collector of Customs[3] and had held that an appeal before this Court regarding an issue of exemption under a notification which was available in respect of specified products, would not be maintainable. The relevant extract of the said decision is set out below: -

2017 SCC OnLine Del 11100 2014 (34) STR 3 (Del)

RAWAL not think that this High Court has jurisdiction to entertain and adjudicate the present appeal. The question raised in the present appeal amongst other things relates to determination of a question relating to the rate of duty of customs and whether or not duty of customs was leviable in view of the exemption Notification 40/2006. Decision in the case of Ernst & Young Private Limited (supra) refers an earlier decision in case of Naveen Chemicals Manufacturing and Trading Company Limited v. Collector of Customs 1993 (68) ELT 3 (SC) wherein, it has been observed as under:

RAWAL purposes of assessment are questions that squarely fall within the meaning of the said expression. A dispute as 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 there for the purposes of assessment, questions arise directly and proximately as to the rate of duty or the value of goods.”

7. After quoting the aforesaid paragraph, in Ernst & Young Private Limited (supra), it has been held as under:

RAWAL or sub-section (5) to Section 35E. However, in spite of the said position, we do not think that the decision in the case of Delhi Gymkhana Club Ltd. (supra) is required to be referred to a Larger Bench. Determination of any question relating to rate of tax would necessarily directly and proximately involve the question, whether activity falls within the charging Section and Service Tax is leviable on the said activity. The said determination is integral and an important injunct to the question of rate of tax. In case Service Tax is not to be levied or imposed and cannot be imposed under the charging Section, no tax would be payable. The said determination would be direct or proximate to the issue of rate of tax, which will include nil tax, when no tax is chargeable.

19. If the reasoning given by the Revenue is to be accepted, it will lead to anomaly and substantial confusion. All assessments necessarily have to determine and decide the rate of tax after determining and deciding whether or not activity is chargeable or tax can be levied. Assessments against the assessee would decide the rate of tax applicable once it is held that the activity is chargeable to tax under the F. Act. The words ‘rate of tax’ in relation to rate of tax would include the question whether or not the activity is exigible to tax under a particular or specific provision. This will be a reasonable and appropriate interpretation and will not cause or result in confusion or ambiguity regarding the appellate forum. Line between exigibility and rate of tax as propounded can be rather thin and RAWAL superfluous in the present statutory context.”