2019 (1) TMI 1322 - HC - Customs

Monetary limit of amount involved in the appeal - the tax effect involved in the present appeal is ₹ 5,04,428/- - Section 130(1) of the Customs Act, 1962 - Held that - The instructions issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes & Customs (Judicial Cell), dated 11th July, 2018, whereby, the monetary limit has been fixed for filing the appeals in the High Courts at ₹ 50,00,000/-. In Para No.3 of the aforesaid instruction, it has also been stated that wherever, monetary limit is less, the appeal shall be withdrawn and the said instruction is applicable to all the pending appeals in the High Courts. Furthermore, the tax effect involved in the present case is very small i.e. ₹ 5,04,428/- - The Apex Court in Commissioner of Income tax Vs. Dhanalekshmi Bank Ltd., 2015 (8) TMI 474 - SUPREME COURT , where the tax effect was low, had dismissed the appeal without going into the merits of the appeal leaving the question of law open. Appeal dismissed.

Summary

Issues:
Challenge under Section 130(1) of the Customs Act, 1962 regarding order dated 11th May, 2017 passed by the Customs, Excise & Service Tax Appellate Tribunal.

Analysis:
The appeal filed under Section 130(1) of the Customs Act, 1962 challenges the order dated 11th May, 2017, passed by the Customs, Excise & Service Tax Appellate Tribunal. The tax effect involved in this appeal is &8377; 5,04,428/-. The respondent had initially claimed a refund of &8377; 73,51,167/-, out of which an amount of &8377; 68,48,739/- was accepted by the Customs Authorities. The Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes & Customs issued instructions fixing the monetary limit for filing appeals in High Courts at &8377; 50,00,000/-. It was noted that the tax effect in the present case is very small, falling below the monetary limit set by the Ministry of Finance. Referring to a Supreme Court case where an appeal was dismissed due to low tax effect, the court highlighted that in such instances, appeals may be dismissed without delving into the merits, leaving the legal questions open for future adjudication.

The court, considering the small tax effect involved in the present case, dismissed the appeal. However, it explicitly clarified that the dismissal should not be construed as an affirmation of the Tribunal's order on merits. The legal issue raised by the revenue was left open for consideration in a suitable case, indicating that the dismissal was primarily due to the minimal tax impact and not a determination on the substantive legal matters. This approach aligns with the precedent set by the Supreme Court in cases where low tax effects led to the dismissal of appeals without a detailed examination of the legal contentions, preserving the option to address those issues in a more appropriate context in the future.