The Principal Commissioner Of Central Tax vs. Schevaran Laboratory PVT LTD

Held

The Court held that the appeals are not maintainable. The primary reasoning was based on the monetary limit stipulated in the CBDT circulars. The Court noted that there was no challenge to the constitutional validity of any provision of the Act or Rule. The monetary limit involved in the present appeals was less than Rs. 1 crore. The Court also referred to a Gujarat High Court judgment in COMMISSIONER OF C. EX., AHMEDABAD – II VS. PARTH PHARMACHEM INDUSTRIES, which was upheld by the Supreme Court, dismissing an appeal on similar grounds of low tax effect and the absence of a challenge to statutory validity. Therefore, the appeals were dismissed on the ground of not meeting the monetary limit criteria for appeals, as the cases did not fall under the exceptional categories outlined in the circulars, specifically concerning the validity of Rule 8(3A) of the Central Excise Rules, 2002. CEA No. 36 of 2019 was also dismissed in light of the decision in CEA No. 65 of 2018.

Facts

The Revenue, represented by the Commissioner of Central GST and Central Excise, Mysuru Commissionerate, filed two appeals (CEA No. 36 of 2019 and CEA No. 65 of 2018) against orders passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). In CEA No. 65 of 2018, the appeal was against CESTAT's order in Appeal No. E/20523/2018-SM concerning Schevaran Laboratory Pvt. Ltd. In CEA No. 36 of 2019, the appeal was against CESTAT's order in Appeal No. E/21672/2018 concerning Adhikari Engineering. The Revenue challenged the CESTAT's decisions which had ruled in favour of the respondents. The appeals were heard analogously due to similar controversies.

Key Issues

1. Whether the appeals filed by the Revenue are maintainable given the monetary limit prescribed by the Central Board of Direct Taxes (CBDT) circulars? 2. Whether the judgment delivered by the Tribunal, which was based on a Gujarat High Court judgment later stayed by the Supreme Court, warrants a remand or deferral of the proceedings? The respondent argued that the appeals are not maintainable as the monetary limit involved is less than Rs. 1 crore, citing CBDT circulars dated 22.08.2019 and 17.08.2011. They contended that the constitutional validity of any provision of the Act or Rule is not under challenge, thus not falling under the exceptions mentioned in the circulars. The appellant (Revenue) argued that the Tribunal's judgment relied on the Gujarat High Court's decision in INDSUR GLOBAL LTD. VS. UNION OF INDIA, which held that using CENVAT credit for excise duty payment is not a violation of Rule 8(3A) of the Central Excise Rules, 2002. The appellant highlighted that this Gujarat High Court judgment was stayed by the Supreme Court, suggesting the matter should be remanded or deferred.