2023(12)LCX0272

SAMSUNG INDIA ELECTRONICS PVT LTD

Versus

Commissioner of Customs

Customs Appeal No. C/52483/2022 decided on 22-12-2023

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.

PRINCIPAL BENCH - COURT NO. III

Defect Diary No.52454/2022 and 4190 others in
Customs Appeal No. C/52483/2022

(Arising out of order-in-appeal No. CC (A) CUS/NCH/D-I/ACC IMP/526-4716/2022- 23 dated 22.09.2022 passed by the Commissioner of Customs (Appeals), New Customs House, New Delhi).

M/s Samsung India Electronics Pvt. Ltd.         Appellant
B-1, Sector 81, Phase-II, Noida
Uttar Pradesh-201305.

VERSUS

Commissioner of Customs                               Respondent
Air Cargo Complex (Import)
New Customs House
Near IGI Airport, New Delhi-110037.

APPEARANCE:

Shri B. L. Narsimhan, Advocate for the appellant
Shri Rakesh Kumar, Authorised Representative for the respondent.

CORAM :

HON’BLE MS. BINU TAMTA, MEMBER (JUDICIAL)
HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

DEFECT MISCELLANEOUS ORDER NO. 315/2023

DATE OF HEARING: 21.09.2023
DATE OF DECISION: 22.12.2023

BINU TAMTA:

The present appeal has been placed before us to decide the preliminary objection/defect as to whether the appellant is liable to pay the court fees on all the 4191 appeals in terms of section 129A(6) of the Customs Act, 1962 (hereinafter referred to as the Act).

2. Briefly stated, the appellant is a regular importer of battery cover, front cover, middle cover and back cover (“phone cover”) and had classified phone cover under tariff item CTI 85177090 (erstwhile) / 85177990 (prevailing) of First Schedule to Custom Tariff Act, 1975 (CETA). The appellant discharged higher duty assessed by the Assessing Officer in respect of 4191 Bills of Entry as assessed under CTI 3920 9999 of Customs Tariff. Being aggrieved by such reassessment, the appellant filed 4191 appeals before Commissioner of Customs (Appeals) who confirmed the assessments in respect of the said bills of entry by the impugned order dated 22.09.2023. The appellant has challenged the said order in the instant appeals before this Tribunal.

3. We have heard Shri B. L. Narasimhan, learned Counsel for the appellant and Shri Rakesh Kumar, the Authorised Representative for the revenue and have also perused the records of the case.

4. Referring to the provisions of Section 129A (6) of the Act, learned Counsel for the appellant submitted that the same is applicable only where “duty and interest is demanded” and since in the present case, there is no demand raised by the customs department and the impugned order has merely confirmed the assessments of the bills of entry, it is purely a case of refund of excess duty deposited by the appellant. Relying on the decisions of this Tribunal in Richemont India Pvt. Ltd., vs. CC (Import and General) New Delhi - 2016 (42) STR 26, Gylph International Ltd. vs. CCEx & ST, Noida - 2013 (31) STR 430 (LB) and Takshal Pharma Pvt. Ltd., vs. CC (Airport), Mumbai - 2007 (218) ELT 675, he submitted that 129A (6) of the Act does not envisage any fees in respect of refund claims. Accordingly, he prayed that they are not liable to discharge the court fees in terms of section 129A (6) of the Act.

5. On the contra, the Authorised Representative for the revenue while seriously objecting the contentions of the appellant, submitted that under the statutory provisions of section 129A (6) of the Act, any appeal filed before the Tribunal where the demand has been disputed/ challenged, requires payment of court fees and there are only two exceptions as specified in section 129A (2) and (4). He denied that section 129A (6) of the Act is not attracted as it is a case of having no demand of duty since the demand was raised by the assessing authority by discarding the self-assessment and enhancing the amount of duty which the appellant deposited under protest.

6. The first point which needs to be considered here is whether the present appeal relates to the classification of the goods in question or is a simple case of refund of the excess amount. At the outset, we take note of Form CA-3 at Para 10 as pointed out by the revenue, where the appellant has categorically stated:

6.1 The aforesaid answer by the appellant itself shows that the issue raised by them in the present appeals pertains to classification of the goods in question and the consequent demand of differential duty.

7. On perusing, the statement of facts in the appeal memorandum, we find from paragraph 4 that the order of assessment on the bill of entry were challenged in an appeal before Commissioner of Customs (Appeals) challenging the classification concluded by the respondent.

“4. Aggrieved by the order of assessment in the impugned Bill of Entry, the appellant had filed an appeal before ld. CCA. In addition to the above, the appellant had filed appeals against the bills of entry challenging the classification concluded by the respondent, and claimed for refund of excess duty discharged. Details of such Bills of Entry along with details of excess duty paid have been annexed herewith as Annexure-4.”

7.1 Further, in the memo of appeal, the appellant explained the manufacturing process and the use or purpose of the back covers, front cover and the middle cover. Had it been a simple case of refund, there was no scope for urging these facts. We may now examine the heading of the grounds of appeal taken by the appellant in the present appeals as:

A) Phone covers are correctly classifiable under CTI 8517 7090 (erstwhile) CTI 8517 7990 (prevailing) of the Customs Tariff.

B) Phone covers are not classifiable under CTH 3920 under Customs Tariff.

C) Without prejudice, specific entry shall prevail over general entry in custom tariff.

D) Without prejudice to the classification undertaken by the noisy, the entire case of revenue is unsustainable.

E) MEITY notification and exemption notification cannot be relied upon for the purpose of classification.

F) Lastly, he submitted that reassessment done by customs officer, contrary to self-assessment by importer or assessee, the proper officer is bound to pass speaking order in terms of section 17(5) of the Act.

7.2 Considering the statement of facts as well as the grounds of appeal, the only logical conclusion is that the challenge in the present appeals relates to the issue of classification only and there is not a whisper of the refund claim. The present appeals have not arisen out of the rejection of any refund claim applications. In fact as appears, no such application for refund has been filed by the appellant.

8. We may now consider the provisions of section 129A (6) of the Act, which reads as under:-

“An appeal to the Appellate Tribunal shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf and shall, irrespective of the date of demand of duty and interest or of levy of penalty in relation to which the appeal is made, be accompanied by a fee of,-

(a) where the amount of duty and interest demanded and penalty levied by any officer of customs in the case of which the appeal relates is five lakh rupees or less, one thousand rupees;

(b) where the amount of duty and interest demanded and penalty levied by any officer of customs in the case to which the appeal relates is more than five lakh rupees but not exceeding fifty lakh rupees, five thousand rupees;

(c) where the amount of duty and interest demanded and penalty levied by any officer of customs in the case to which the appeal relates is more than fifty lakh rupees, ten thousand rupees:

Provided that no such fee shall be payable in the case of an appeal referred to in sub-section (2) or a memorandum of cross-objections referred to in sub-section (4).”

9. The provisions of section 129A (6) makes it mandatory for the appellant to deposit the court fees where the demand has been disputed or challenged arising out of assessment or reassessment. The only exception as per the Proviso is where under subsection (2) the Committee of Commissioners decides to file an appeal against the order of the Commissioner (Appeals) or a memorandum of cross objections as provided in subsection (4) is filed. Needless to mention that section 129A (7) even where an application for rectification of mistake (ROM) and restoration of an appeal (ROA) is filed the party has to deposit Rs 500/- as court fees and the only exception is where an application has been filed by or on behalf of the Principal Commissioner of Customs or Commissioner of Customs no such fee shall be payable.

10. In support of his submissions, Shri Rakesh Kumar relied on the decision of this Tribunal in the case of E-BIZ. COM PVT. LTD. vs Commissioner of Central Excise, Noida - 2008 (12) STR 438, where the controversy related to the provisions of Section 86(6) of the Finance Act, 1994 which are pari-materia to the provisions of section 129A (6) of the Act and hence it squarely applies to the present case, the relevant paragraphs of the order are quoted below:-

“8. From a bare glance at the above provisions it would appear that the appellant is required to pay fee between one thousand rupees and ten thousand rupees depending on the amount of service tax and interest demanded and penalty levied by any Central Excise Officer. It may not be out of place to mention here that a new sub-section (6A) was also inserted by the said amendment, vide Finance (No. 2) Act, 2004, requiring payment of a fee of five hundred rupees on miscellaneous applications for stay or rectification of mistake application or for any other purpose as well as for restoration of appeal or an application. It is evident from the provisions of subsection (6) of Section 86 as they originally stood and stand now that if an assessee desires to prefer appeal in the Appellate Tribunal, he is required to pay the requisite fee. They do not envisage any exemption except in case of appeals by the department or crossobjections by either the assessee or the department.

9. Learned Counsel for the appellant, however, submitted that in terms of Section 86(6) the appellant is required to pay fee only when there is demand of service tax interest and penalty - the amount thereof determines the amount of fee. Where there is no such demand by way of service tax and interest or penalty, no fee would be payable. The submission is wholly misconceived and, if we may say so, self-defeating. This, indeed, is one of the reasons why we are inclined to think that the appeal is not maintainable - that there must be a demand by way of service tax or interest or penalty. On a plain reading it is manifest that appeal lies only where there is a demand towards service tax and/or interest, or penalty has been imposed. We are inclined to think that even if the appeal were maintainable, the appellant is required to pay the minimum fee prescribed by the statute, that is, one thousand rupees. We hold accordingly.”

In the aforesaid case, the Tribunal distinguished the earlier decision in the case of Taksal Pharma Pvt. Ltd., vs. Commissioner - 2007 (218) ELT 675, observing that dispute in that case related to further fee, which was found to be sufficient.

11. The case of Gylph International Limited vs. Commissioner, Central Excise & ST, Noida - 2013 (31) STR 430 relied upon by the appellant, we find that the issue decided by the Larger Bench, also related to the charging of court fees under section 86(6) of the Finance Act, 1994 where it was distinguished that the legislature did not intend to charge any fees in appeal relating to refund or rebate. The Bench also observed that since provisions under section 129A (6) of the Customs Act, and 35B (6) of Central Excise Act are identical, no fee is payable in respect of appeals pertaining to refund of excise duty or customs duty. The decision of the Tribunal in Taksal Pharma Private Limited (supra) was thus approved. Later, in the case of Richemont India Private Limited (supra), the Tribunal once again retreated that the principle of charging fees has already been settled in Gylph International Limited, (supra), and since there is no involvement of any demand of customs duty, interest or levy of penalty, therefore no court fee is payable by the appellant. The earlier orders passed, therefore, clarified that in the case of refund or rebate and where there is no issue of any demand of duty, interest or penalty no court fees shall be charged in filing an appeal before this Tribunal.

12. We have already held that the challenge in the present appeal relates to classification and consequent demand of duty due to denial of exemption benefits. The appellant had chosen to pay the enhanced duty as assessed by the assessing officer at the time of clearance 'under protest', It cannot be said that the present appeals are not relating to demand and therefore no court fees is payable by the appellant. As the appellant had paid in advance the enhanced duty, the department was not required to issue the “Show Cause Notice cum Demand”. We agree with the submissions made by the learning AR that quantum of duty assessed, demand of duty and payment of duty are all interrelated and once the amount of duty paid is challenged by a party at the time of payment itself or subsequently, it proves that there was a demand and that the party has acceded to pay the demanded duty at the time of clearance of goods for one or the other reason and the party generally registers dissent against such demand of duty by paying it 'under protest'. In other words, once the duty is paid „under protest' and the party challenges the same by filing an appeal, it necessarily implies that demand of duty is disputed and consequently the case would fall under section 129A (6) of the Act and the party would be liable to pay the court fees on such appeal being filed.

13. It would be relevant to take note of the analysis given by the department in the written submissions, as under:

“9. In the present case the demand was raised by the assessing authority by way of discarding the self assessment and enhancing the amount of duty which the appellant disputed hence deposited under protest. In effect, the demand was the differential amount between what was assessed under self assessment and that of assessed by the assessing officer. Thus, it would be legally highly fallacious to consider the case as a case having no demand of duty. Moreover, the decision in Richemont India Pvt. Ltd. vs C.C (Imports & General) New Delhi, 2016 (42) STR 26, has relied on the Larger Bench in Gylph International Ltd., vs C.C. Ex. & ST Noida, 2013 (31) STR 430 (LB) which is not relevant in the present case since the present matter is not related to refund/rebate.

16. The submission of the appellant that since they have paid the duty in advance and no demand is left, it will not attract section 129A(6) of the Act is without application of mind. Even in cases where the advance payment of duty is made during investigation or at the time of clearance of goods under protest the demand can very well be raised under the relevant provisions of the Customs Act. If their submissions have to be relied, those relevant provisions of the Customs Act, 1962 would become otiose.

17. Once they are in appeal with respect to the dispute related the demand (which they have paid in advance), the said demand do not get extinguished. In fact, it has become explicit now once they have themselves challenged the deemed demand by payment made under protest in the beginning itself. That challenge has continued up to the Tribunal after their appeal has been rejected by the commissioner Appeals also. The said dispute with respect to demand shall continue further to higher Courts by the aggrieved parties.”

14. We are in complete agreement with the above submissions of the revenue. Also the principles enunciated in the decisions referred to and the analysis of the statutory provisions in the facts of the present case would make the appellant liable to pay the court fees. The reasoning adopted by the appellant that it is not a case of demand of duty is basically frivolous as had it not been so there was no scope to file the present appeals challenging the impugned order. The objection raised by the Registry of the deficit court fees in filing the present appeals is justified. The appellant is, accordingly directed to deposit the requisite court fees in terms of section 129A (6) of the Act within a period of two weeks from the date of the order.

(Pronounced on 22^nd December 2023).

(BINU TAMTA)
MEMBER (JUDICIAL)

(HEMAMBIKA R. PRIYA)
MEMBER (TECHNICAL)