2019 (11) TMI 838 - HC - Service Tax

Maintainability of appeal - monetary amount involved in the appeal - HELD THAT - The Central Board of Indirect Taxes and Customs had issued circulars from time to time and the latest being the circular, dated 22.08.2019, which fixed the monetary limits for the Department to file appeals against the order of the Tribunal and per se, the appeal pending before this Court, subject to the condition, the monetary limit should be above ₹ 1 crore. Earlier there was an instruction stipulating the lesser amount, however, the instruction dated 22.08.2019 issued by the Central Board of Indirect Taxes and Customs (CBITC) is not only applicable to the fresh cases but also the pending cases. This appeal is dismissed as withdrawn and the substantial questions of law raises in this appeal are left open.

Summary

Issues:
1. Challenge to the order passed by the Customs Excise and Service Tax Appellate Tribunal.
2. Interpretation of Section 80 of the Finance Act 1994 regarding waiver of penalty.
3. Determination of the respondent's status as a small-time entrepreneur.
4. Applicability of circulars issued by the Central Board of Indirect Taxes and Customs on monetary limits for filing appeals.

Analysis:
1. The High Court of Madras addressed the appeal filed by the Revenue against the order of the Customs Excise and Service Tax Appellate Tribunal. The Tribunal's findings were challenged based on substantial questions of law raised by the appellant.

2. The first issue involved the interpretation of Section 80 of the Finance Act 1994 concerning the waiver of penalty. The Tribunal's decision regarding the respondent-assessee's lack of leverage in obtaining the Service Tax amount on time and their status as a small-time entrepreneur was questioned for constituting a "reasonable cause" for penalty waiver.

3. The second issue focused on the Tribunal's findings regarding the respondent's interaction with the service receiver for timely payment of Service Tax. The criteria for discharging the Service Tax liability as per Section 67(2) of the Finance Act 1994 was examined in the context of the respondent's status as a small-time entrepreneur compared to the turnover limits specified in Notification No.6/2005-ST.

4. The judgment also considered the circulars issued by the Central Board of Indirect Taxes and Customs, particularly the instruction dated 22.08.2019, which set monetary limits for Departmental appeals. The Court noted that the appeal in question did not meet the revised monetary limit of above ?1 crore, leading to its dismissal as withdrawn. The substantial questions of law raised in the appeal were left open, and no costs were awarded. The connected miscellaneous petitions were subsequently closed as a result of the judgment.