Appeals to Supreme Court from CESTAT under S. 130E(b) should involve substantial question of law, rules SC

In a judgment which could have significant impact on appeals to Supreme Court from Customs, Excise and Service Tax Appellate Tribunal (CESTAT), the Supreme Court has held that appeals under Section 130 E(b) of the Customs Act should be limited to those involving a substantial question of law..The judgment was delivered by Justices Ranjan Gogoi and Ashok Bhushan in an appeal filed by Steel Authority of India Limited..The Court in its judgment discussed the sweep and purport of Section 130E(b) and laid down the conditions to be satisfied before admitting an appeal under the said Section..The provisions.Section 130E(b) of the Customs Act provides for an appeal to the Supreme Court from CESTAT against any order passed by the CESTAT relating to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment..It reads as follows:.“Section 130 E: Appeal to Supreme Court. – An appeal shall lie to the Supreme Court from –.(b) any order passed before the establishment of the National Tax Tribunal by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment.”.Two other relevant provisions in this context are Section 130E(a) and Section 130F of the Customs Act..Under Section 130E(a) an appeal is provided to the Supreme Court from any judgment of the High Court delivered on a ‘Reference’, where the High Court certifies the case to be a fit one for appeal to the Supreme Court..Section 130F provides that the provisions of the Code of Civil Procedure, 1908 relating to appeals to the Supreme Court shall apply in the case of appeals under section 130E as they apply in the case of appeals from decrees of a High Court..The relevant provision of the Code of Civil Procedure envisaged by section 130F is Section 109 which provides that there should be a substantial question of law for an appeal to lie to the Supreme Court from the High Court. It states,.“Subject to the provisions in Chapter IV of Part V of the Constitution and such rules as may, from time to time, be made by the Supreme Court regarding appeals from the Courts of India, and to the provisions hereinafter contained, an appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court, if the High Court certifies—.(i) that the case involves a substantial question of law of general importance; and.(ii) that in the opinion of the High Court the said question needs to be decided by the Supreme Court.”.Judgment.The Court began its judgment by stating its inclination to define the contours of jurisdiction under Section 130E(b)..“Order on the admission of this appeal has been kept pending to enable the Court to ascertain the true sweep and purport of the appellate power of this Court under Section 130E(b)of the Customs Act, 1962 (as amended). The language of the above provision of the Act having indicated a very road and expansive appellate jurisdiction, the precise contours thereof were felt necessary to be determined and the admissibility of the present appeal tested on the aforesaid basis.”.The Court then proceeded to state that the issue for determination is whether conditions imposed under Section 130F for exercise of appellate power by the Supreme Court will apply to appeals under Section 130E(b) or not..“Section 130F has weathered all amendments and make the provisions of the Code of Civil Procedure relating to an appeal to the Supreme Court applicable to appeals under Section 130 of the Act. The question, therefore, would be whether the provisions of Section 130F would be applicable to both sets of appeals that may be filed before Supreme Court, namely, against orders of the High Court as well as those of the appellate tribunal.”.Proceeding to answer the question, it held that since Section 130F has been made applicable to all appeals under Section 130E of the Act, there is no reason to treat appeals under Section 130E(b) differently from appeals under Section 130E(a) when it comes to applicability of Section 130F..“The provisions of the Civil Procedure Code 1908 relating to appeals to the Supreme Court from a decree of a High Court, as far as may be, has been made applicable to all appeals to the Supreme Court under Section 130E of the Act. Section 130F of the Act, all along, has dealt with both sets of appeals that would lie to the Supreme Court, namely, against an order of the High Court in exercise of its appellate or reference jurisdiction, as the case may be, or against the order of the appellate tribunal. If that be so, there is no reason why the appellate power of the Supreme Court under Section 130E(b) against the order of the appellate tribunal should be construed in a manner different from the contours of the appellate power under Section 130E(a) against the order of the High Court.”.The Court then extrapolated the scope of Section 130E(b)..“Section 130E(b) of the Act provides for a direct appeal to the Supreme Court against an Order of the appellate tribunal, broadly speaking, on a question involving government revenue. This seems to be in view of the fact that the order that would be under appeal may go beyond the inter se dispute between the parties and effect upon a large number of assessees. The issue, in such an event, surely will be one of general/public importance…..It is only such questions of importance, alone, that are required to be decided by the Supreme Court and by the very nature of the questions raised or arising, the same necessarily have to involve issues of law going beyond the inter partes rights and extending to a class or category of assessees as a whole.”.It held that such limitation as stated above has to be understood to be inbuilt with respect to Section 130E(b)..“This is the limitation that has to be understood to be inbuilt in Section 130E(b) of the Act which, in our considered view, would also be consistent with the role and jurisdiction of the Supreme Court of India as envisaged under the Constitution. Viewed from the aforesaid perspective, the jurisdiction of the Supreme Court under Section 130E(b) of the Act or the pari materia provisions of any other Statute would be in harmony with those contained in Chapter IV of Part V of the Constitution.”.Conditions for admitting an appeal under Section 130E(b).On the above basis, the Court laid down that one of the conditions for admitting an appeal under Section 130E(b) is that the question raised must involve a substantial question of law which has not been answered or on which, there is a conflict of decisions necessitating a resolution..“On the basis of the discussion that have preceded, it must therefore be held that before admitting an appeal under Section 130E(b) of the Customs Act, the following conditions must be satisfied:.(i) The question raised or arising must have a direct and/or proximate nexus to the question of determination of the applicable rate of duty or to the determination of the value of the goods for the purposes of assessment of duty. This is a sine qua non for the admission of the appeal before this Court under Section 130E(b) of the Act..(ii) The question raised must involve a substantial question of law which has not been answered or, on which, there is a conflict of decisions necessitating a resolution..(iii)If the tribunal, on consideration of the material and relevant facts, had arrived at a conclusion which is a possible conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter..(iv) The tribunal had acted in gross violation of the procedure or principles of natural justice occasioning a failure of justice.”.Read the judgment below.