APRIL 29, 2024

By S K Rahman, IRS, working as AR at Delhi CESTAT

(Second article of the series of 3 articles)

1. WHENEVER any appeal is filed under Section 129A of Customs Act, 1962to the Appellate Tribunal(CESTAT), the requisite checks that are required to be done, apart from many others are :

a) Pre deposit under Section 129E of Customs Act, 1962

b) Court fee under section 129A(6) of Customs Act, 1962

c) The Respondent

2. On all the three above aspects, the Hon'ble CESTAT has recently come out with Orders which are of great significance. Last week the aspect of Pre Deposit was discussed. This week, let us discuss about the aspect of Court fee under section 129A(6) of Customs Act, 1962 . Next week, the aspect of who should be Respondent would be covered

3. Any Appeal to the Hon'ble CESTAT shall be accompanied by a court fee as specified in section 129A(6) of Customs Act, 1962 as given below :

"(6) 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 to 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:"

4. Thus when appeal is being filed against the demand of duty, interest and penalty, the appellant has to deposit Court Fee depending upon the amount of duty, interest and penalty . The issue is when importer appellant pays the duty and then files an appeal against such payment whether they are required to pay such Court Fee . The amount of Court Fee becomes substantial when appeals are filed treating each assessed Bill of Entry as an Assessment Order

5. M/s  Samsung  India Electronics Pvt.Ltd imports front cover, middle cover and back cover of Mobile Phones which are embedded into mobile phone in manufacturing the mobile phone . All these covers are further worked upon and then fitted into Mobile phone which can not be removed by user.

6. The importer has declared them under CTH 85177090 attracting BCD@15%, SWS@ 10% of BCD and IGST @12% (Sr no 203 of Schedule II of notification no 01/2017-IGST (Rate) dated 28.06.2017 as amended). The Department has re classified them under CTH 39209999 and leviable to BCD @ 15%, social welfare surcharge @10% of BCD, IGST @ 18% (serial number 106 of schedule III of notification number 01/2017-IGST [rate] dated 28.06.2017, as amended). The difference in rate of duty is in IGST i.e. IGST @12% (as per importer) and IGST @ 18% (as per Department).

7. The Principal Commissioner of Customs, Air Cargo Complex (Import), New Delhi has passed Order-in-Original No. 62/2020-21/S.J./Principal Commissioner dated 23/02/2021 confirming the classification under CTH 39209999 and demanded differential duty for the period 06.02.2018 to 21.12.2019 . Party filed Customs Appeal No. 50484/2021 against this O-in-O

8. For the subsequent period, the importer kept on filing Bills of Entry self assessed and classified impugned goods under CTH 39209999 (of course, under protest) and kept on clearing the consignments But, the importer treating the assessed Bill of entry as Assessment Order, filed appeals Bill of Entry wise with Commissioner (Appeals). The ld. Commissioner (Appeals) New Delhi vide order-in-appeal No. CC (A) CUS/NCH/D-I/ACC IMP/526-4716/2022- 23 dated 22.09.2022 has upheld the classification under CTH 39209999 in favour of Revenue . Against the impugned Order-in Appeal, the importer has filed 4191 appeals for the 4191 Bills of Entry. The Registry of CESTAT has admitted the appeals allotted the Customs Appeal No. C/52483/2022 and other appeal Nos. - 2023-TIOL-1158-CESTAT-DEL. Later, when it was pointed out about non payment of Court Fee appeal wise for each Bill of Entry, defectswere raised with Defect Diary No.52454/2022 and 4190 Defect Diary Nos. These Defects have come for hearing on 21-09-2023,

9. During the hearing 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.

10. The Revenue has 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

11. The Hon'ble CESTAT has passed Order No.- Defect Miscellaneous Order No. 315/2023 dt. December 22, 2023- 2023-TIOL-1158-CESTAT-DEL where in it is held that

(i) para 7.2 of Order :" 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. "

(ii) para 14 of Order : "in complete agreement with the 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 10 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"

12. In accordance with the Defect Miscellaneous Order No. 315/2023 dt. December 22, 2023 - 2023-TIOL-1158-CESTAT-DEL the appellant has paid the requisite Court Fee, for 4191 appeals (for all 4191 Bills of Entry) which is quite substantial when compared to the disputed duty amount.As the party accepted this Order and paid the requisite court fee, this Defect Miscellaneous Order becomes precedent for many more cases to follow .

13. The Court Fee paid by the appellants goes to Department of Revenue. It is non refundable irrespective of the decision on the appeal .It is the responsibility of Revenue to ensure that the provisions of Customs Act 1962 such as Sec 129A(6) are properly followed when appeals are filed in Hon'ble CESTAT.

14. Similar situations arise many times. For a certain period Department confirms classification/valuation etc and demands duty . Even though appeal is filed by party against the first Order-in-Original, pending appeal, for the subsequent period the parties keep doing the self assessment as per the as per the first Order-in-Original They may file appeal Bill of Entry wise with the competent Appellate Authority. When such appeals come before Hon'ble CESTAT,if dispute is on duty demand, then the Court Fee under section 129A (6) of the Customs Act 1962 has to be paid Bill of Entry wise as appeals are filed for each Bill of Entry . It should not be wrongly interpreted that the Section 129A (6) of the Act, is applicable only where "duty and interest is demanded" and since in these cases, there is no demand raised by the Revenue, there is no need to pay requisite Court Fee.

15. So the take away from this Hon'ble CESTAT Defect Miscellaneous Order No. 315/2023 dt December 22, 2023 - 2023-TIOL-1158-CESTAT-DEL is that the Court Fee under section 129A(6) of the Customs Act 1962 has to be paid in disputes of duty, interest and penalty when Appeals are filed before Hon'ble CESTAT. Payment of court face is mandatory even though appeal is against self assessed Bill of Entry where the importer has paid duty voluntarily as long as they are disputing the duty paid .If appropriate Court Fee is not paid, an objection can be raised by Revenue.

(The views expressed are personal and not in official capacity)