The Commissioner Goods And Service Tax Commissionerate Ludhiana vs. M/S Aman Forgings PVT LTD Ludhiana

Facts

The Commissioner of Goods and Services Tax, Ludhiana (appellant) filed an appeal against an order dated April 3, 2018, passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh. The CESTAT had allowed an appeal filed by M/s Aman Forgings (P) Ltd. (respondent). The respondent had challenged an order-in-original dated April 9, 2013, 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. However, the Supreme Court had disposed of similar appeals as not pressed due to low tax effect.

Held

The Court held that the appeal was not maintainable for a decision on merits in view of the low tax effect, which was admittedly below Rs. 2 crores. This was consistent with the Department's Circular dated August 6, 2024, which stipulated that appeals with a tax effect below Rs. 2 crores would not be filed or pursued before High Courts. The Court also noted that similar appeals, including Civil Appeal No. 6652 of 2018, had been disposed of as not pressed for the same reason. Although the appellant's counsel argued that the vires were in question, the Court found no justification for continuing the proceedings given the low tax effect and the Supreme Court's precedent. 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 is maintainable and requires a decision on merits, notwithstanding the low tax effect, given that the vires of Rule 8(3A) of the Central Excise Rules, 2002 are in question? Petitioner/Appellant's Arguments: The appellant contended that while the vires of Rule 8(3A) were in question, they did not have instructions to withdraw the appeal. However, they were unable to distinguish the present case from the Supreme Court's decision in Civil Appeal No. 6652 of 2018, which was dismissed as not pressed due to low tax effect. The appellant also noted that this was an appeal against a Tribunal order, not a writ petition. Revenue/State's Arguments: No arguments were recorded for the respondent.