2019 (3) TMI 1057 - HC - Customs

Monetary amount involved in the appeal - maintainability of appeal - Whether the Tribunal is correct in dismissing appeal filed by the department on the ground of Monetary limit issued in the circular issued by the Board, when there is no request from the department/appellant/litigant to invoke the said instructions? - Held that - It is contended that the issue involved in the case of the assessee is a case of refund and it is also recurring in nature and therefore, in terms of sub-Clause (c) of paragraph 3 of the circular instructions dated 17.08.2011, as modified on 17.12.2015, the Revenue is entitled to pursue the appeals on merits - the Revenue cannot be foreclosed from raising such a plea before the Tribunal and if the Revenue is able to satisfy the Tribunal that the case of the respondent-assessee falls within the exceptional circumstances as mentioned in the circular instructions, then the matter is required to be dealt with on merits or otherwise, the Tribunal will be well within its jurisdiction to close the appeals on the ground of low tax effect, however, such a finding needs to be recorded by the Tribunal. We have come across cases where the assessee would contend that the Revenue s appeal is hit by the monetary limit fixed in the circular instructions. The Revenue would not have given any instructions to the Standing Counsel to not press the appeal. We will examine the facts of the case and ascertain as to whether the case would fall in one of the exceptions mentioned in the circular instructions and we find that it is not one such case, we have applied the monetary circular and closed the proceedings leaving the substantial questions of law open. Therefore, in our considered view, this would be the right approach to cases where the Revenue does not have specific instructions to withdraw an appeal either before the Tribunal or before a Court - the matter should be remanded to the Tribunal for fresh consideration. The appeals are restored to the file of the Tribunal. The Tribunal shall hear the Revenue regarding their contention that the dispute raised by the Revenue is relating to refund and recurring in nature and they are entitled to contest the appeals irrespective of the monetary limit fixed in the circular instructions dated 17.12.2015 as reiterated in the instructions dated 25.05.2018.

Summary

Issues:
Appeal against Tribunal's order based on monetary limit in circular instructions.

Analysis:
The appeals by the Revenue under Section 130 of the Customs Act were directed against the common order passed by the Customs, Excise and Service Tax Appellate Tribunal. The substantial question of law raised was whether the Tribunal was correct in dismissing the appeal based on a monetary limit mentioned in a circular issued by the Board, without any request from the department to invoke the said instructions.

The Revenue challenged the Order-in-Appeal by the first appellate authority, which allowed the assessee's appeals and set aside the orders passed by the adjudicating authority. The Tribunal dismissed the appeals filed by the Revenue solely on the ground that the amount involved was less than the prescribed threshold limit of Rs. 10,00,000. The Revenue contended that the Department should not be compelled to withdraw an appeal solely based on monetary policy, especially if an important question of law is involved.

On the merits of the case, the Revenue argued that the importer failed to explain the contradiction between the certification of the Chartered Accountant and the financial documents regarding excess duty. They also disputed the addition of a notional high sea sale commission, citing Board's Circular No. 32/2004-Cus. Apart from these grounds, the Revenue raised additional points before the Court.

The respondent contended that the order passed by the first appellate authority was well-reasoned and not hit by the doctrine of unjust enrichment. The Tribunal did not examine the merits of the case but rejected the appeals based on the monetary limit mentioned in the circular instructions. It was argued that the Revenue should be allowed to pursue the appeals on merits if the case falls within exceptional circumstances as mentioned in the circular.

The Court noted that the circular issued by the Board had exceptions, and if the Revenue can show that the case falls within these exceptions, the Tribunal should deal with the matter on merits. The Court emphasized that the Tribunal should not close appeals solely based on low tax effect without proper examination. The matter was remanded to the Tribunal for fresh consideration, following similar judgments in previous cases.

In conclusion, the civil miscellaneous appeals were allowed, the Tribunal's order was set aside, and the appeals were restored to the Tribunal for further consideration. The Tribunal was directed to hear the Revenue's contentions regarding the dispute raised and for the assessee to raise objections accordingly.