Calcutta HC Dismisses Customs Department Appeal in Valuation Dispute with Supreme Petrochem [Read Order]

The issue raised by the Revenue involved the import of goods by Supreme Petrochem Ltd. under Customs Tariff Item No. 29025000 through various Indian ports. The Department alleged that the importer had been evading customs duty by not declaring certain elements of freight that, in its view, should have been considered part of the assessable value.

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According to the Revenue, the omission violated Section 14 of the Customs Act, 1962, read with Rule 10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. On these grounds, the Department sought to challenge the CESTAT’s decision, which had ruled in favor of the importer, although the Tribunal’s order details were not discussed in the High Court’s ruling.

The High Court noted that the appeal could not be entertained due to a jurisdictional limitation. Section 130(1) of the Customs Act, 1962, was amended to restrict appeals to the High Court in matters involving the “determination of any question having a relation to the rate of duty or the value of goods for assessment.” Since the present case revolved squarely around the valuation of imported goods, the Court held that it lacked the jurisdiction to hear the appeal.

It was held that the issue raised in this appeal by the Revenue concerns the valuation of the goods in question, and therefore, there is a clear difficulty in entertaining this appeal by this Court, as the appeal is not maintainable in terms of Section 130(1) of the Act.

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In dismissing the appeal, the Court consisting of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) left the Department’s proposed “substantial questions of law” open, making it clear that the ruling does not reflect a judgment on the merits of the Revenue’s claims. The bench also noted that the Department was free to explore “such remedies as may be available to them under the law.” This leaves the door open for the Revenue to consider moving the Supreme Court or seeking alternate statutory recourse, depending on the specific facts and grounds available.

The Court, following the dissmissal, allowed the Department’s counsel to retrieve the original certified copy of the impugned Tribunal order, instructing the Registry to retain a photocopy for record purposes.

This ruling asserts a crucial procedural limitation for Revenue authorities that is, valuation-related appeals post-July 1, 2023, are outside the purview of the High Courts. By asserting the bar laid down under the amended Section 130(1), the Court emphasized that statutory forums must be carefully chosen in line with jurisdictional boundaries.

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