In Brief
Motorola India imported duty-free materials for manufacturing pagers under a customs exemption notification. When it stopped production, unutilized materials remained. Customs authorities demanded recovery of Rs. 96+ lakhs in duty plus interest and penalty for breach of the exemption condition. CESTAT allowed Motorola's appeal. The Commissioner appealed to the High Court, which rejected it on the ground that the issue involved \"rate of duty\" and should go to the Supreme Court. The Supreme Court held that disputes over breach of exemption conditions are inter partes matters outside the \"rate of duty\" exception. Such cases lie to the High Court under Section 130 of the Customs Act, not to the Supreme Court. The Court remitted the matter to the High Court for reconsideration on merits."
The lawyer headnote and full judgment text are available to registered users.