2014 (7) TMI 1129 - AT - Central Excise

Maintainability of appeal - Monetary limit of appeal to High court - Held that - Benefit to which the assessee is entitled to should not be dependent on the date of the decision, over which neither the assessee nor revenue has no control. In this context, the circular would be discriminatory, if it is held to be prospective only. We have also noticed that the Bangalore Bench of the Tribunal in the case of CCE v. IOCL and Others 2015 (5) TMI 443 - CESTAT BANGALORE in relation to appeals of 2007 dismissed the appeal on the ground that duty and penalty involved is less than ₹ 5 lakhs. The Tribunal held that even where appeals were filed prior to issue of the circular by the Board prescribing monetary limits for filing the appeals by the Revenue, in the light of the decision of Hon ble Karnataka High Court in CIT v. Ranka & Ranka (2011 (11) TMI 449 - KARNATAKA HIGH COURT). - Decided against Revenue.

Summary

Issues:
Appeal against Commissioner (Appeals) order setting aside adjudication order - Interpretation of Board's circular on monetary limits for filing appeals - Application of circular retrospectively - Power of Board to regulate filing of appeals - Benefit of circular to assessee irrespective of decision date.

Analysis:
The appeal was filed by the Revenue against the Commissioner (Appeals) order setting aside the adjudication order. The Revenue argued that although the demand of duty was confirmed by the adjudicating authority, the amount involved might be less than Rs. 5 lakhs. However, the Revenue contended that the Board's Circular No. 390/Misc./163/2010-JC, dated 20-10-2010, should not apply retrospectively based on the decision of the Hon'ble Madras High Court in a specific case. The Hon'ble Madras High Court, in the case of Sundaram Fasteners Ltd., emphasized that regardless of the monetary limit, if a substantial question of law necessitates consideration, the circular should not hinder the Court from evaluating the case's merits. The Court's observation focused on the legal issues raised, distinguishing between the levy of penalty and the question of interest under relevant sections of the Central Excise Act, 1944.

The respondent's advocate referred to a subsequent circular issued by the Board, F. No. 390/Misc/163/2010-JC, dated 12-12-2013, which clarified the Department's stance on pleading judgments accepted due to low amounts. This circular highlighted the Board's authority to regulate appeals by specifying monetary limits under applicable Acts. The Hon'ble Karnataka High Court's decision in the case of Commissioner of Income Tax, Bangalore v. Ranka & Ranka emphasized the importance of applying beneficial instructions to pending appeals, ensuring relief to the assessee and expediting the resolution of cases with significant tax implications. The Court stressed that the circular's benefits should not be restricted based on the decision date, as observed in a related Tribunal case involving appeals dismissed due to low duty and penalty amounts.

Consequently, the Tribunal dismissed the Revenue's appeal in alignment with the Board's circular and the precedents set by the Hon'ble Karnataka High Court. The decision was influenced by the principles of efficient judicial process and equitable application of guidelines to pending cases, as underscored by the legal interpretations and precedents cited in the judgment.