Comnr,Central Excise vs. Rajesh Gadodia

Held

The Court held that the appeal stands disposed of in view of the Circular dated 11.07.2018 issued by the Central Board of Indirect Taxes and Customs. This Circular sets a monetary limit of Rs. 50,00,000/- for filing appeals before the High Court. As the tax effect in the present appeal was stated to be less than Rs. 50 lac, the appeal was not maintainable under the revised monetary limits. The Court granted liberty to the appellant (Department) to revive the appeal within thirty days from the date of the order in case of any difficulty. The reasoning is based on the binding nature of the CBIC Circular on the Department for reducing litigation. The ratio decidendi is that appeals filed by the Department in legacy Central Excise and Service Tax matters, where the tax effect falls below the prescribed monetary limits in the CBIC Circular, are not to be entertained by the High Courts.

Facts

The appeal was filed by the Department against an order dated 05.01.2009 passed by the CESTAT, Kolkata. The tax effect in dispute was stated to be less than Rs. 50 lac. The Central Board of Indirect Taxes and Customs (CBIC) issued a Circular dated 11.07.2018, in exercise of powers under Section 35R of the Central Excise Act, 1944, which was made applicable to Service Tax vide Section 83 of the Finance Act, 1994. This circular fixed monetary limits for filing appeals by the Department. For High Courts, the monetary limit below which an appeal shall not be filed was set at Rs. 50,00,000/-. This instruction applied to legacy issues relating to Central Excise and Service Tax, including pending cases.

Key Issues

1. Whether the present appeal, with a tax effect of less than Rs. 50 lac, is maintainable before the High Court in light of the CBIC Circular dated 11.07.2018, which sets a monetary limit of Rs. 50,00,000/- for filing appeals before High Courts in legacy matters? The Department argued that the Circular dated 11.07.2018, issued under Section 35R of the Central Excise Act, 1944, and Section 83 of the Finance Act, 1994, mandates that appeals shall not be filed if the tax effect is below the specified monetary limits. Since the tax effect in this case is less than Rs. 50 lac, the appeal should not be entertained. The Petitioner (though not explicitly named, it is the party against whom the appeal is filed by the Department) did not record any arguments in the judgment.