2014 (12) TMI 452 - AT - Central Excise

Penalty under Section 11AC - Adjudication Monetary limit under National Litigation Policy prescribed by Board Circulars viewed to be non restrictive in filing instant appeal on merit by Revenue - 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. even where appeals were filed prior to issue of the circular by the Board prescribing monetary limits for filing the appeals by the Revenue would be applicable, in the light of the decision of Hon ble Karnataka High Court in CIT Vs Ranka & Ranka (2011 (11) TMI 449 - KARNATAKA HIGH COURT) - Decided against Revenue.

Summary

Issues Involved:
Appeal against order setting aside adjudication, applicability of Board's Circular No.390/Misc./163/2010-JC, retrospective application of circular, interpretation of circular by High Court, power of Board to regulate filing of appeals, benefit to assessee from circular, discriminatory nature of circular, application of monetary limits for filing appeals by Revenue, dismissal of appeal based on circular and High Court decision.

Analysis:

1. Adjudication Order Set Aside:
The Revenue filed an appeal challenging the Commissioner (Appeals) order setting aside the adjudication order. The Tribunal noted the confirmed demand of duty and penalty in two cases. The issue revolved around the applicability of the Board's Circular No.390/Misc./163/2010-JC, with the Revenue arguing that the circular should not apply based on a decision by the Hon'ble Madras High Court in a specific case.

2. Interpretation of Circular by High Court:
The Tribunal considered the observations of the Hon'ble Madras High Court in the case of Sundaram Fasteners Ltd. regarding the Board circular. The High Court emphasized that the monetary limit should not hinder the Court from considering substantial legal questions. The High Court's decision in the case also addressed penalty and interest under the Central Excise Act, highlighting the importance of legal merits over monetary limits.

3. Regulation of Filing Appeals by Board:
The Tribunal discussed the power vested with the Board to regulate filing of appeals in the Tribunal and Courts, specifying monetary limits below which appeals need not be filed. Reference was made to a circular clarifying that judgments accepted for low amounts should not be relied upon for subsequent proceedings until the matter is settled on merits. The Tribunal also cited a decision by the Hon'ble Karnataka High Court emphasizing the importance of timely disposal of appeals.

4. Benefit to Assessee and Discriminatory Nature of Circular:
The Tribunal examined the benefit to the assessee from the circular and raised concerns about its discriminatory nature if held to be prospective only. Reference was made to a decision by the Bangalore Bench of the Tribunal dismissing appeals based on the monetary limits set by the Board, even for appeals filed before the circular was issued. The Tribunal aligned its decision with the Board's circular and the ruling of the Hon'ble Karnataka High Court.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue following the Board's circular and the decision of the Hon'ble Karnataka High Court, emphasizing the application of monetary limits for filing appeals and the importance of considering legal merits beyond monetary considerations.