Commissioner Of Central G S T And Central Excise vs. M/S Duplex Light Engineering Works

Facts

The appeals were filed by the Commissioner, Central Goods, Service Tax & Central Excise, challenging orders concerning Shri Krishna Laxmi Steel Udyog (P) Ltd. and M/s Duplex Light Engineering Works. The tax effect in all these appeals was stated to be less than rupees two crores. The appellants' counsel argued that the matter involved the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002, which, according to departmental instructions, should be contested regardless of the tax effect. However, the Court noted that the constitutional validity of this rule had already been struck down by several High Courts, and the Tribunal had followed those judgments. The Court also expressed doubt about its ability to examine the constitutional validity of the rule in these appeals, especially since the proposed substantial questions of law did not raise this issue.

Held

The Court held that the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002, could not be said to be involved in these appeals. The Court noted that this rule had already been struck down as ultra vires by several High Courts, and the Tribunal had merely followed those judgments. Furthermore, the Court expressed doubt as to whether it could examine the constitutional validity of the rule in the present appeals. The Court also observed that the substantial questions of law proposed by the appellants did not raise the issue of constitutional validity. Consequently, the Court disposed of the appeals on the ground of low tax effect, leaving the questions of law open, in line with departmental instructions dated 02.11.2023 and 06.08.2024, which advise against pursuing appeals with a tax effect below rupees two crores unless specific exceptions apply.

Key Issues

1. Whether the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002, is involved in these appeals, thereby justifying their contestation despite a low tax effect, as per departmental instructions dated 02.11.2023? Petitioner's Contention: The petitioner (appellant) argued that the appeals should be contested because they involve the constitutional validity of Rule 8(3A) of the Central Excise Rules, 2002, which falls under an exception in the departmental instructions for pursuing appeals irrespective of the tax amount. They relied on paragraph 2(a) of the Instructions dated 02.11.2023. Revenue's Contention: The judgment does not record any specific arguments from the revenue or state. However, the Court's observations suggest the revenue was attempting to argue for the constitutional validity or at least the applicability of the rule.