2015 (2) TMI 233 - HC - Central Excise

Maintainability of appeal - Whether excise duty is leviable on samples drawn for batch analysis and retention by the respondent, considering it to be deemed removal under Rule 9 and Rule 49 of the erstwhile Central Excise Rules, 1944 - Held that - excise duty of ₹ 15,754/- has been imposed upon the assessee under Section 11A( 1) of the Central Excise Act by the Joint Commissioner, Central Excise. Penalty of ₹ 15,754/- was imposed by him. Against the said order, appeal was preferred by the assessee. The Commissioner (Appeals) allowed the appeal filed by the assessee and deleted the penalty. However, the demand of excise duty of ₹ 15,754/- was upheld. The said order was challenged before the Central Excise & Service Tax Appellate Tribunal (CESTAT). The Tribunal set aside the excise duty. This Tax Appeal has been filed by the Department challenging the order of the CESTAT. It is not disputed by the appellant's counsel that the amount of excise duty imposed upon the assessee is less than ₹ 2 lakh and in view of the Circulars issued by the Department which have been considered in COMMR. OF C. EX. & CUS., VADODARA-I VS. PHARMANZA HERBAL PVT. LTD. reported in 2014 (9) TMI 330 - GUJARAT HIGH COURT and Commissioner of C. Ex. & Customs Vs. Stovec Industries Ltd. reported in 2013 (1) TMI 72 - GUJARAT HIGH COURT , Tax Appeal below amount of ₹ 2 lakh is not maintainable. Even though the appeal was filed prior to issuance of the Circulars in the year 2010, the Circulars would apply even to the pending appeal. - Decided against Revenue

Summary

Issues:
1. Whether excise duty is leviable on samples drawn for batch analysis and retention by the respondent under Rule 9 and Rule 49 of the Central Excise Rules, 1944?
2. Maintainability of the Tax Appeal below the amount of &8377; 2 lakh based on Circulars issued by the Department.

Analysis:
1. The High Court addressed the issue of excise duty levied on samples drawn for batch analysis and retention by the respondent. The appellant was charged excise duty of &8377; 15,754 under Section 11A(1) of the Central Excise Act, with a penalty imposed as well. The Commissioner (Appeals) upheld the excise duty but deleted the penalty. Subsequently, the CESTAT set aside the excise duty. The Department filed a Tax Appeal challenging the CESTAT's decision. The appellant's counsel acknowledged that the excise duty amount was less than &8377; 2 lakh, making it non-maintainable based on Circulars issued by the Department. The High Court, referring to relevant case laws, dismissed the appeal as not maintainable due to the amount being below the threshold set in the Circulars, even though the appeal was filed before the Circulars were issued.

2. The second issue revolved around the maintainability of the Tax Appeal below the amount of &8377; 2 lakh. The Circulars issued by the Department, as cited in previous cases, set a threshold for the maintainability of appeals below this amount. Despite the appeal being filed before the Circulars were issued, the High Court held that the Circulars would apply even to pending appeals. Citing specific cases like COMMR. OF C. EX. & CUS., VADODARA-I VS. PHARMANZA HERBAL PVT. LTD. and Commissioner of C. Ex. & Customs Vs. Stovec Industries Ltd., the Court concluded that the appeal was not maintainable due to the excise duty amount being less than the prescribed threshold. Consequently, the Court dismissed the appeal on this ground.

This comprehensive analysis of the judgment delves into the legal intricacies of the issues involved, highlighting the application of relevant laws, Circulars, and precedents to arrive at the final decision.