By TIOL News Service

NEW DELHI, AUGUST 07, 2017: THIS legal saga started some 23 years ago with a Show Cause Notice dated 13.12.1994 by the Commissioner of Customs alleging mis-declaration of imported goods and that the importers were mere name-lenders. The Commissioner imposed a penalty of Rs.25 lakhs on Solly Perumal, a Customs House Agent. On appeal, the CESTAT (CEGAT as it then was) reduced the penalty imposed on Solly Perumal from 25 lacs to 5 lacs. Aggrieved with this decision of the Tribunal, the Revenue has filed an appeal upon grant of special leave under Article 136 of the Constitution, before the Supreme Court.

At the outset, the Supreme Court wondered why the Revenue chose to file a special leave application seeking leave to challenge the order of the Tribunal, instead of filing an appeal before the High Court. If there was a substantial question of Law involved in the Tribunal's judgement, the Revenue could have appealed to the High Court. If the issue involved a question relating to classification or valuation, they could have appealed to the Supreme Court. So the premises could be:

1. There is no substantial question of law - as they did not appeal to the High Court.

2. There was no question of classification or valuation - as they did not appeal to the Supreme Court and chose to file an SLP.

The Supreme Court observed that naturally it would expect serious and substantial question(s) of law arising from the order of the Tribunal to be agitated by the Revenue before this Court. Even on this score the Revenue has failed to satisfy the Court inasmuch as the Tribunal, which is the last fact finding authority, in its impugned order dated 25.08.2003, has held that, there is lack of conclusive proof with regard to actual identification of ball bearings. Coincidentally, the case of the Revenue was/is that the imported goods were declared as lead scrap whereas the goods actually imported were ball bearings attracting a higher rate of duty.

The Tribunal in paragraph 70 of its order further held that the Revenue had failed to prove the presence of ball bearings in the two consignments. The entire findings of the Tribunal including, is on a pure appreciation of the evidence and materials on record.

The Supreme Court further observed that the Tribunal being the last forum for determination of questions of fact and no perversity in the appreciation of the materials being discernible from the order of the Tribunal, these appeals cannot be scrutinized any further.

Consequently, the appeals of Revenue are dismissed and the Tribunal's order is affirmed.

(See 2017-TIOL-276-SC-CUS-LB)