Principal Commissioner Of Central Excise, Kol-Iv vs. M/S. Star Battery LTD

Held

The Court condoned the delay in filing the appeal, noting that while not fully convinced by the explanation, the appeal could not be pursued by the revenue due to low tax effect. The Court observed that even if the revenue were successful before the Supreme Court and the Gujarat High Court's decision was reversed, the matter would have to be remanded to the Tribunal for a decision on merits. However, the tax effect in each of the five appeals before the Tribunal was less than the threshold limit fixed by the CBEC circular, meaning the Tribunal could not decide on merits. Therefore, the Court decided to dispose of the appeal on the ground of low tax effect, leaving the questions of law open for adjudication at an appropriate stage. The observations made by the Tribunal touching upon the validity of Rule 8(3A) of the Central Excise Rules were expressly left open.

Facts

The Principal Commissioner of Central Excise, Kolkata (appellant/revenue) filed an appeal before the High Court against a common order dated November 27, 2018, passed by the Customs, Excise and Service Tax Appellate Tribunal (Tribunal). The Tribunal had allowed appeals filed by M/s. Star Battery Ltd. (respondent/assessee) by following a Gujarat High Court decision, without deciding on merits. The revenue's appeal was filed with a delay of 927 days. The total demand in dispute, arising from five show cause notices, amounted to Rs. 1,05,00,205/-. The Tribunal's order was a common one, and the revenue filed a single appeal before the High Court. Similar issues had been considered by the High Court in other cases (CEXA 31 of 2021 and CEXA/29/2021) where appeals were disposed of on the ground of low tax effect.

Key Issues

1. Whether the appeal filed by the revenue is maintainable despite a significant delay and a low tax effect, particularly when substantial questions of law are raised? Petitioner/Appellant (Revenue) argued that the total excise duty involved in the instant case is above the threshold limit fixed by circulars. They contended that when substantial questions of law are raised, the circular fixing the monetary limit should not be applicable, and the High Court should entertain the appeal to decide these questions of law. The revenue also pointed out that the Gujarat High Court decision followed by the Tribunal has been challenged before the Supreme Court, which has granted an interim stay. Respondent/Assessee's arguments were not recorded in the judgment.