2024 (1) TMI 958 - HC - Central Excise

Maintainability of appeals on excise valuation and rate: Supreme Court jurisdiction required when valuation or duty rate is in issue

The note addresses whether appeals from adjudication orders involving determination of assessable value or rate of duty fall within High Court or Supreme ... Maintainability of appeal before High Court - appropriate forum - determination of value of the excisable goods for the purpose of assessment which falls within the exclusive jurisdiction of the Hon’ble Supreme Court under Section 35L of the Central Excise Act, 1944 - whether the question of rate of duty or value of the goods are involved or not and not the scope of appeal or questions raised in appeal? - HELD THAT:- The provisions under Section 130 and Section 130E of the Customs Act, 1962 deals with appeal to High Court and Supreme Court respectively which are pari materia to Section 35G and Section 35L of the Central Excise Act, 1944, hence, the ratio of the judgment rendered by different Courts under the Customs Act, 1962 would apply to Central Excise Act, 1944 also. In the case of UNION OF INDIA VERSUS GUWAHATI CARBON LTD. [2012 (11) TMI 885 - SUPREME COURT] it has been held by the Hon’ble Apex Court that against the decision of Tribunal regarding assessable value excluding freight, transportation and insurance charges, an appeal therefrom shall lie before Supreme Court. Further, in the case of COMMISSIONER OF SERVICE TAX VERSUS ERNST & YOUNG PVT. LTD. AND OTHERS [2014 (2) TMI 1133 - DELHI HIGH COURT], it is held by the Delhi High Court that where the Order-in-Original (Adjudication Order) is relating to several issues or questions and one of the issue or question relates to rate of tax or valuation, the Appeal would lie before the Supreme Court under Section 35L of the Central Excise Act, 1944 and not before the High Court under Section 35G. After going through the judgments including the Board’s Circular on the issue of maintainability and the facts of the case wherein the SCN as well as OIO also perused; reference of which are made in the preceding paragraphs, it clearly transpires that one of the issues involved relates to determination of valuation of excisable goods and/or rate of duty of excisable goods, amongst other things, for the purpose of assessment. There are no hesitation in holding both these appeals as not maintainable and the same would lie before the Hon'ble Apex Court under Section 35L of the Act, inasmuch as, the jurisdiction of the High Court in such matters are specifically excluded under Section 35G and it falls within the exclusive jurisdiction of the Apex Court under Section 35L of the Act. Both these appeals are, hereby, dismissed at the admission stage itself. Issues Involved:1. Maintainability of Appeals under Section 35G of the Central Excise Act, 1944.2. Jurisdiction of the High Court versus the Supreme Court regarding valuation of excisable goods.Summary:Issue 1: Maintainability of Appeals under Section 35G of the Central Excise Act, 1944The Assessee raised a preliminary objection regarding the maintainability of the appeals filed by the Appellant Department under Section 35G of the Central Excise Act, 1944. They argued that the High Court has no jurisdiction to entertain these appeals as one of the questions relates to the determination of the value of excisable goods for assessment purposes, which falls under the exclusive jurisdiction of the Supreme Court per Section 35L of the Act. The Assessee emphasized that any appeal involving valuation or rate of duty should be directed to the Supreme Court.Issue 2: Jurisdiction of the High Court versus the Supreme Court regarding valuation of excisable goodsThe Revenue countered that the core issue in the appeals was the 'non-admission of bona-fide evidence' by the CESTAT, Kolkata, not the valuation of excisable goods. They argued that the CESTAT's decision was based on the inadmissibility of computer printouts and other evidence, not on valuation, and thus, the appeals should be maintainable under Section 35G. The Revenue maintained that none of the questions raised pertained to the determination of the valuation of excisable goods or the rate of duty.Court's Analysis and Decision:The Court, after reviewing the records, found that one of the issues in the Show Cause Notice and the Order-in-Original was indeed related to the valuation of excisable goods. The Court referred to several judgments and the Central Board of Indirect Taxes and Customs Circular, which clarified that if an order involves questions related to the rate of duty or valuation for assessment purposes, the appeal should lie with the Supreme Court under Section 35L, not the High Court under Section 35G.The Court cited cases such as CST Vs. Ernst & Young Pvt. Ltd., CST Vs. Scott Wilson Kirkpatrick (I) Pvt. Ltd., and Pr. Commissioner Vs. Raja Dying, which supported the view that the nature of the order (involving valuation or rate of duty) determines the jurisdiction, not the scope of the appeal.Conclusion:The Court concluded that since one of the issues involved in the appeals related to the determination of the valuation of excisable goods, the appeals were not maintainable before the High Court. The jurisdiction in such matters falls exclusively within the purview of the Supreme Court under Section 35L of the Central Excise Act, 1944. Consequently, both appeals were dismissed at the admission stage.