Court holds questions relating to customs duty rate and valuation fall exclusively within Supreme Court's jurisdiction under Section 130E of the Customs Act, 1962
In a significant ruling on August 28, 2026, the Bombay High Court (Division Bench comprising Justices B.P. Colabawalla and Farhan P. Dubash) dismissed appeals filed by the Commissioner of Customs (General), Air Cargo Complex, challenging a 2024 order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai. The appeals related to the classification and customs duty exemptions on salvage equipment imported as `stores' for operations involving the distressed foreign-going vessel MSC Chitra, which had collided with MV Khalija II.
The key legal question before the High Court was whether it had jurisdiction to entertain appeals involving the determination of customs duty rates and valuation of goods under the Customs Act, 1962. The Revenue's appeals questioned CESTAT's finding that the imported equipment qualified as `stores' under Sections 86 and 88 of the Customs Act and that the exemption from customs duty applied irrespective of the equipment's use on coastal vessels rather than directly on the MSC Chitra.
However, the Court observed that such questions directly concern the rate of customs duty or valuation of goods, which, under Section 130E(b) of the Customs Act, lie exclusively within the jurisdiction of the Supreme Court. The High Court emphasized that Section 130 of the Act explicitly excludes from its appellate jurisdiction any order concerning determination of customs duty rates or valuation for assessment purposes, reserving that domain for the apex court to ensure uniformity and avoid fragmented adjudication.
Referring to the Supreme Court's recent precedent in Alupro Building Systems Pvt. Ltd. v. Commissioner of Central Excise (2026 SCC Online SC 986), the Court highlighted that the exclusion of jurisdiction is wide and includes even peripheral questions linked to duty rates or valuation. The ruling underscored the importance of consistent interpretation given the pan-India ramifications for salvagers importing `stores' for salvage operations.
The High Court accordingly dismissed the appeals on the ground of lack of jurisdiction and clarified that the Revenue remains free to approach the Supreme Court directly under Section 130E of the Customs Act to contest the CESTAT order dated December 13, 2024.
This decision reinforces the principle that specialized fiscal questions involving customs duty rates and valuation must be adjudicated by the Supreme Court, thereby maintaining uniformity in customs law interpretation across the country. The ruling also affirms the legal treatment of `stores' used in salvage operations as falling within the ambit of Sections 86 and 88 of the Customs Act, subject to the Supreme Court's ultimate determination.
Bottom Line:
Customs Act, 1962 - Jurisdiction of High Court - Questions relating to the determination of rate of customs duty or valuation of goods for assessment fall exclusively within the jurisdiction of the Supreme Court under Section 130E(b) of the Customs Act, 1962.
Statutory provision(s):
Customs Act, 1962 Sections 86, 88, 111(n), 111(o), 112(a), 112(b), 114A, 114AA, 130, 130E
