Comnr.Of Central Exc vs. Hindalco Industries

Held

The Court held that the appeal filed by the Department was to be disposed of in view of the CBIC Circular dated 11.07.2018. The Circular clearly stipulated that appeals shall not be filed before the High Court if the monetary limit is below Rs. 50,00,000/-. As the tax effect in the present appeal was less than Rs. 50 lac, the appeal was rendered infructuous. The Court disposed of the appeal with a liberty to revive it in case of any difficulty. The reasoning was based on the explicit instructions provided in the Circular aimed at reducing government litigation by raising monetary limits for filing appeals. The ratio decidendi is that appeals filed by the revenue that fall below the prescribed monetary limits in departmental circulars are liable to be disposed of without a decision on merits, unless specific exceptions apply.

Facts

The appeal was filed by the Department against an order dated 15.02.2006 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 its powers under Section 35R of the Central Excise Act, 1944, which 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/-. The circular also stated that it applied to legacy issues relating to Central Excise and Service Tax, and to pending cases. The High Court noted the issuance of this circular and the tax effect in the present appeal.

Key Issues

1. Whether the appeal filed by the Department is maintainable before the High Court given the monetary limit stipulated in the CBIC Circular dated 11.07.2018? (Question of law) Arguments for the Department: The Department relied on the CBIC Circular dated 11.07.2018, which stipulated a monetary limit of Rs. 50,00,000/- for filing appeals before the High Court. Since the tax effect in the present appeal was less than Rs. 50 lac, the Department argued that the appeal should not have been filed or should be withdrawn. Arguments for the Petitioner/Appellant: Not recorded in the judgment.