Commissioner Of CGST And Cx, Kolkata South Comm. vs. M/S. Das Brothers And Co.

Held

The High Court held that the appeal filed by the revenue is disposed of on the ground of low tax effect, as the demand of Rs. 1,57,553/- is below the threshold limit for pursuing appeals. Consequently, no recovery can be effected from the respondent/assessee. The Court further stated that the finding rendered by the Tribunal with regard to the validity of Rule 8(3A) of the Central Excise Rules, 2002, is set aside, and the legal issue concerning its validity is left open to abide by the decision of the Hon'ble Supreme Court. The reasoning is that the primary ground for disposal is the low tax effect, and the substantive legal issue on Rule 8(3A) remains undecided at the Supreme Court level.

Facts

The appeal was filed by the revenue (Commissioner of CGST and CX, Kolkata South Commissionerate) against an order dated June 10, 2019, passed by the Customs, Excise and Service Tax Appellate Tribunal (Tribunal). The Tribunal's order was in relation to an Ex. Appeal concerning a demand of Central Excise duty of Rs. 1,57,553/- raised by an order in original dated January 5, 2016. The High Court noted that similar matters had been disposed of on the ground of low tax effect, below the threshold limit for pursuing appeals. The appeal was admitted to scrutinize the effect of a Supreme Court order granting stay and a Gujarat High Court decision in Indsur Global Ltd. vs. Union of India. The High Court had previously left the legal issue regarding the validity of Rule 8(3A) of the Central Excise Rules, 2002, undecided in similar cases.

Key Issues

1. Whether the appeal filed by the revenue is maintainable on the ground of low tax effect, considering the demand of Rs. 1,57,553/- and the threshold limit for appeals fixed by a Central Board Circular? (Question of fact and law). The appellant (revenue) contended that while the tax effect is low, the appeal was admitted to scrutinize the effect of the Supreme Court's stay order and the Gujarat High Court's decision in Indsur Global Ltd. regarding the validity of Rule 8(3A) of the Central Excise Rules, 2002. The respondent (assessee) argued that the appeal should be dismissed on the ground of low tax effect. The Court also considered the legal issue concerning the validity of Rule 8(3A) of the Central Excise Rules, 2002, which was struck down by the Gujarat High Court and stayed by the Supreme Court.