The Commissioner, Goods And Services Tax Commissionerate vs. M/S Jtg Alloys PVT LTD

Facts

The Commissioner of Goods and Services Tax, Ludhiana (appellant) filed an appeal against an order dated January 2, 2018, passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had allowed an appeal filed by M/s JTG Alloys Pvt. Ltd. (respondent). The respondent had challenged an order-in-original dated March 1, 2011, which demanded duty by invoking Rule 8(3A) of the Central Excise Rules, 2002. The respondent's challenge was based on a Gujarat High Court decision holding Rule 8(3A) as ultra vires. The appellant noted that the Gujarat High Court's decision was under challenge before the Supreme Court. Subsequently, the Supreme Court disposed of its appeal as not pressed due to low tax effect. The present appeal also involves a tax effect below Rs. 2 crores, aligning with a departmental circular dated August 6, 2024, which states that appeals with a tax effect below Rs. 2 crores will not be pursued.

Held

The Court held that the appeal should be disposed of without deciding on the merits of the case due to the low tax effect involved. The Court noted that the tax effect in the present appeal is admittedly lower than Rs. 2 crores, which is the threshold specified in the departmental circular dated August 6, 2024, for not filing or pursuing appeals before High Courts. The appellant's counsel could not distinguish the present case from Civil Appeal No. 6652 of 2018, which was dismissed as not pressed by the Supreme Court in identical circumstances. The Court also took into consideration that this was an appeal against a Tribunal order, not a writ petition. Therefore, the Court found no justification for continuing the proceedings. However, the question of law involved was expressly kept open for decision in appropriate proceedings. The appeal was accordingly disposed of.

Key Issues

1. Whether the appeal filed by the Department should be dismissed on the grounds of low tax effect, considering the departmental circular dated August 6, 2024, and the Supreme Court's decision in Civil Appeal No. 6652 of 2018? The appellant argued that although the vires of Rule 8(3A) of the Central Excise Rules, 2002 were in question, and they did not have instructions to withdraw the appeal, they were unable to point out any distinction in the present matter that warranted a decision on merits, especially in light of the Supreme Court's disposal of a similar appeal as not pressed due to low tax effect. The appellant also highlighted that the present case is an appeal challenging a Tribunal order, not a writ petition. The respondent, though not represented, had previously argued that Rule 8(3A) of the Central Excise Rules, 2002, was ultra vires, relying on the Gujarat High Court's decision in Indsur Global Ltd. vs. Union of India.