2017 (1) TMI 973 - HC - Central Excise

Maintainability of appeal - monetary limit for filing appeal - Held that - an appeal shall not be filed before the High Court in case where the monetary impact is less than ₹ 15,00,000/-. In the instant cases tax effect is less than the limit of ₹ 15 lakhs as prescribed in the Instructions issued by the Ministry of Finance Department of Revenue Central Board of Excise & Customs, in F.No.390/Misc./163/2010-JC, dated 14.12.2015, and hence, both the appeals stand dismissed as not pressed, preserving the substantial question of law for determination in an appropriate case - appeal not maintainable.

Summary

Issues:
- Appeal against Final Order Nos.742 and 743/2010 passed by the Customs, Excise and Service Tax Appellate Tribunal
- Substantial question of law regarding availing Cenvat Credit of Service Tax on various items
- Withdrawal of appeals by the Department based on Ministry of Finance Instructions
- Monetary limits for filing appeals by the Department before CESTAT/High Courts and Supreme Court

Analysis:
The High Court of Madras heard appeals by the Commissioner of Central Excise, Chennai, against Final Order Nos.742 and 743/2010 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai. The appeals were admitted on 11.03.2011, raising a substantial question of law regarding the eligibility of availing Cenvat Credit of Service Tax paid on various items such as car insurance policy, outstation travel service, group mediclaim policy, director's and officers' liability policy, public liability policy, canteen equipment and building repairs, cab services, cars and vehicle repair service.

During the proceedings, Mr. E.Vijay Anand, the learned Standing Counsel for the Department, sought permission to withdraw the appeals. This withdrawal was based on instructions issued by the Ministry of Finance, Department of Revenue, Central Board of Excise & Customs, in F.No.390/Misc./163/2010-JC, dated 14.12.2015. The Ministry's instructions aimed to reduce government litigation by providing monetary limits for filing appeals by the Department before the CESTAT, High Courts, and Supreme Court.

The Court acknowledged that a substantial question of law did exist in the case. However, considering the insignificant value involved in the appeals and in adherence to the Ministry's instructions, the Court decided not to entertain appeals where the monetary impact is less than ?15,00,000. As the tax effect in the instant cases was below this prescribed limit, both appeals were dismissed as not pressed. The Court emphasized that the substantial question of law would be preserved for determination in a more appropriate case and ruled that no costs were to be awarded in this matter.