Factual error committed by the Tribunal appealable before High Court

Hari Radhakrishanan, Derrick Sam and Dhaval Shah, Advocates for the Petitioner. Ms. Maithili Mehta and R.J. Oza, Advocates for the Respondent.

JUDGMENT

Ms. Harsha Devani, J. – Rule. Ms. Maithili Mehta, learned standing counsel waives service of notice of rule on behalf of the first respondent and Mr. R. J. Oza, learned senior standing counsel waives service of notice of rule on behalf of the second respondent. Having regard to the controversy involved in the present case, which lies in a very narrow compass, with the consent of the learned advocates for the respective parties, the matter was taken up for final hearing today.

2. This petition under Article 226 of the Constitution of India is directed against the order dated 6.2.2014 and order dated 23.6.2014 passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as “the Tribunal”) to the extent of demand of duty in respect of 16 mm TMT bars imported by the petitioner vide bill of entry No. 74 dated 21.8.2008.

3. The facts stated briefly are that the petitioner imported Deformed Steel Bars Grade HRB from Hongkong of various sizes, viz., 16 mm, 20 mm, 25 mm and 32 mm. The petitioner filed bills of entry together with other relevant documents like packing list, bill of lading, etc. The petitioner claimed that the goods imported by it are unalloyed and non-alloyed steel as per Indian Standard Classification of Steels (IS 7598 : 1990) as all the elements involved are less than the limits specified in IS 7598 : 1990. The TMT bars of 16 mm which are in dispute contain silicon and vanadium less than the limits prescribed in Chapter Note 1(f) of Chapter 72 of the Customs Tariff Act and, accordingly, this category of TMT bars would be eligible to exemption under Serial No. 190C of the Table under Notification No. 21/2002-Cus dated 1.3.2002. It is the case of the petitioner that quantity of different bars was separately indicated in the packing list and bills of lading. A show cause notice came to be issued to the petitioner proposing to levy additional customs duty contrary to the exemption granted in terms of Serial No. 202A of Notification 21/2002 which culminated into an order-in-original dated 5.12.2011, confirming the stand taken in the show cause notice. The petitioner carried the matter in appeal before the Commissioner of Customs (Appeals), Kandla, who, by an order dated 5.2.2013, dismissed the appeal. The petitioner carried the matter in further appeal before the Tribunal, which, by an order dated 6.2.2014 partly allowed the appeal by holding that the petitioner is eligible for the benefit of CVD as per Serial No. 202A of Notification No. 21/2002-Cus dated 1.3.2002. The Tribunal further held that since separate value of 16 mm, 20 mm, 25 mm and 32 mm TMT bars was not made available, separate duty cannot be assessed for 16 mm TMT bars.

4. Subsequently, the petitioner filed an application for rectification of mistake in the order passed by the Tribunal on the ground that though 16 mm TMT bars imported by the petitioner are eligible for exemption under Serial No.190C of Notification No. 21/2002-Cus dated 1.3.2002, the same cannot be practically extended as the separate value of 16 mm was not made available and, therefore, the duty exemption available for 16 mm TMT bars cannot be assessed. It is the case of the petitioner that it has submitted copies of packing list and bill of lading to indicate the quantity of each size of the TMT bars and as per the documents, the quantity of 16 mm TMT bars is 957.86 MT. The weight of 16 mm TMT bars is 957.860 MT and the value of 16 mm TMT bars as per the import invoice is USD 915 per MT. Accordingly, the value of 16 mm TMT bars works out to USD 876442. The Tribunal, however, by the impugned order dated 23.6.2014 rejected the application by observing that the final order was passed after considering the written submissions made by both the sides on the issue wherein the Bench had come to the conclusion in the absence of separate value of 16 mm TMT bars, separate duty cannot be assessed for 16 mm TMT bars. Being aggrieved, the petitioner has filed the present petition.

5. Mr. Hari Radhakrishanan, learned advocate for the petitioner, assailed the impugned order by inviting the attention of the court to certain documents which were already on the record before the Tribunal, to point out that as per the test results the content of vanadium in 16 mm TMT bars was within the prescribed limit and hence, the petitioner was entitled to the benefit of the exemption notification in respect of the 16 mm TMT bars. It was pointed out that the Tribunal to that extent has accepted the case of the petitioner; it, however, while partly allowing the appeal, had observed that separate duty cannot be assessed for 16 mm TMT bars as separate value of 16 mm TMT bars was not available. It was pointed out that the said finding of the Tribunal is contrary to the record of the case, inasmuch as, the bill of lading clearly indicates the quantity of 16 mm TMT bars and the commercial invoice clearly shows the price of the 16 mm TMT bars. It was submitted that, therefore, the value of the 16 mm TMT bars could be easily worked out on the basis of the price and the quantity of 16 mm TMT bars. Under the circumstances, the Tribunal was not justified in rejecting the application for rectification of mistake made by the petitioner.

6. Mr. R. J. Oza, learned senior standing counsel for the second respondent raised a preliminary objection to the maintainability of the petition on the ground that the impugned order passed by the Tribunal relates to the determination of the rate of duty and/or value of the goods for the purpose of assessment and, therefore, against the impugned order passed by the Tribunal, appeal would lie before the Supreme Court under the provisions of section 130E of the Customs Act, 1962 (hereinafter referred to as “the Act”) and not before this court. Under the circumstances, the appeal deserves to be dismissed on the preliminary ground of not being maintainable before this court.

6.1 On the merits of the case, the learned counsel has reiterated the contents of the affidavit-in-reply filed on behalf of the respondents No.1 and 2.

7. Since an objection has been raised to the very maintainability of the petition on the ground that appeal against the impugned order of the Tribunal would lie to the Supreme Court, it would be necessary to firstly deal with the said objection.

8. It is an admitted position that against an order passed by the Tribunal 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 the goods for the purposes of assessment, an appeal would lie to the Supreme Court under section 130E of the Act. However, the bar under section 130 read with section 130E of the Act in relation to a question relating to determination of the rate of duty operates qua entertaining an appeal under section 130 of the Act. However, while exercising powers under Article 226 of the Constitution of India would be different. Having regard to the fact that an appeal against any order relating to any dispute involving determination of any question relating to the rate of duty or value of goods for the purposes of assessment, lies before the Supreme Court and not before this court, ordinarily, this court even in exercise of powers under Article 226 of the Constitution of India, would not entertain such a petition. Therefore, the nature of the dispute brought before this court is required to be examined.

9. From the facts noted hereinabove, it is abundantly clear that insofar as the dispute raised before this court is concerned, the same does not directly relate to the rate of duty or value of goods for the purposes of assessment. The only controversy that has been brought before this court is that the Tribunal has factually erred in observing that the value of 16 mm TMT bars was not available on the record and hence, separate duty could not be assessed for the 16 mm TMT bars. The petition raises a narrow controversy, based upon a factual error committed by the Tribunal. Under the circumstances, in the opinion of this court, this is not a case where the petitioner is required to be relegated to avail of the alternative remedy under the statute. Considering the scope and nature of the controversy involved, this court is of the view that the contention raised by the learned counsel for the respondent regarding the maintainability of the petition does not merit acceptance.

10. On the merits of the case, as can be seen from the impugned order dated 23.6.2014 passed on the rectification of mistake application made by the petitioner, the Tribunal has rejected the application on the ground that in the absence of separate value of 16 mm TMT bars, separate duty cannot be assessed for 16 mm TMT bars. As noticed hereinabove, the learned counsel for the petitioner has clearly demonstrated before the court that the relevant material to establish the value of 16 mm TMT bars was already there on the record in the form of the bill of lading indicating the quantity of goods as well as the commercial invoices indicating the price of the 16 mm TMT bars. Therefore, the duty of 16 mm TMT bars can easily be worked out on the basis of the available record. Under the circumstances, the finding recorded by the Tribunal in the order dated 6.2.2014 as well as in the impugned order dated 23.6.2014 made on the rectification application to the effect that separate value of 16 mm TMT bars was not available, is clearly incorrect and contrary to the record. Under the circumstances, to that extent the finding recorded by the Tribunal is perverse to the record of the case. The impugned order dated 23.6.2014 being contrary to the record of the case, therefore, cannot be sustained.

11. For the foregoing reasons, the petition succeeds and is, accordingly, allowed. The impugned order dated 23.6.2014 passed by the Tribunal on the Application No. C/ROM/12189/2014 made by the petitioner is hereby quashed and set aside. The rectification of mistake application is hereby restored to the file of the Tribunal. The Tribunal shall decide the application afresh in accordance with law after affording an opportunity of hearing to the learned counsel for the respective parties and considering the material on the record. Rule is made absolute accordingly with no order as to costs.