The Commissioner Goods And Service Tax Commissionerate F Block Rishi Nagar Ludhiana vs. M/S Inderjit Forgings (P) LTD. D-131, Phase-V Foca

Facts

The appeal was filed by the Commissioner, Goods and Services Tax Commissionerate, Ludhiana, challenging an order dated January 2, 2018, passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh. The CESTAT had allowed an appeal filed by the respondent, M/s Inderjit Forgings (P) Ltd. The respondent had challenged an order-in-original dated August 11, 2010, which demanded duty by invoking Rule 8(3A) of the Central Excise Rules, 2002. The respondent relied on a Gujarat High Court decision holding Rule 8(3A) as ultra vires. The Department noted that the Gujarat High Court's decision was under challenge before the Supreme Court.

Held

The Court held that the appeal should not be pursued due to the low tax effect, which was admittedly below Rs. 2 crores. This was in line with the Department's Circular dated August 6, 2024, stating that appeals with a tax effect below Rs. 2 crore would not be filed or pursued before High Courts. The Court noted that in identical circumstances, Civil Appeal No. 6652 of 2018 was dismissed as not pressed. The Court also observed that the present case was an appeal challenging a Tribunal order, not a writ petition. Therefore, there was no justification for continuing the proceedings. However, the question of law involved was expressly kept open for decision in appropriate proceedings. The appeal was disposed of accordingly.

Key Issues

1. Whether the appeal filed by the Department should be pursued given the low tax effect, in light of the Department's own circulars and the Supreme Court's disposal of similar matters? The appellant (Department) argued that while the vires of Rule 8(3A) were in question, and they did not have instructions to withdraw, they were unable to point out any distinction in the present case that warranted a decision on merits, especially considering the low tax effect. They referred to Civil Appeal No. 6652 of 2018, which was disposed of as not pressed due to low tax effect. The respondent did not appear, and therefore, no arguments were recorded on their behalf.