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2021 (2) TMI 201 - HC - Central ExcisePermission for withdrawal of appeal - monetary limit involved in the appeal - Waiver of penalty - Section 11AC of the Central Excise Act, 1944 - HELD THAT - The Revenue seeks to withdraw the case on account of low tax effect in terms of the circular dated 22.8.2019 issued by the Central Board of Indirect Taxes and Customs. By the said Circular, the monetary limit for filing or pursuing any matter before the High Court has been increased to ₹ 1 Crore. It is further submitted that the tax effect in this case is less than the threshold limit. Appeal is dismissed on the ground of low tax effect and the substantial question of law raised is left open.
Issues Involved:
1. Appeal against order under Section 35G(2) of the Central Excise Act, 1944 and Section 83 of Finance Act, 1994. 2. Setting aside of equal penalty under Section 11AC of the Central Excise Act, 1944. 3. Withdrawal of the case due to low tax effect in accordance with a circular issued by the Central Board of Indirect Taxes and Customs. Analysis: Issue 1: Appeal against order under Section 35G(2) of the Central Excise Act, 1944 and Section 83 of Finance Act, 1994: The judgment states that the appeal was filed under Section 35G(2) of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The order dated 07.01.2016 made in Final Order No.40049/2016 by the Customs, Excise & Service Tax Appellate Tribunal, Chennai was challenged in this appeal. The appeal was admitted based on a substantial question of law regarding the imposition of equal penalty under Section 11AC of the Central Excise Act, 1944. Issue 2: Setting aside of equal penalty under Section 11AC of the Central Excise Act, 1944: The substantial question of law raised in the appeal was whether the Tribunal was correct in setting aside the equal penalty imposed under Section 11AC of the Central Excise Act, 1944. This decision was questioned due to the non-disclosure of the recovery of the cost of tooling from the customer in the invoices and the payment of duty by the assessee after the department's inspection. The arguments presented by the respective counsels were heard by the court. Issue 3: Withdrawal of the case due to low tax effect: The Revenue sought to withdraw the case citing low tax effect as per a circular issued by the Central Board of Indirect Taxes and Customs. The circular increased the monetary limit for filing or pursuing matters before the High Court to ?1 Crore. The Revenue stated that the tax effect in this case was below the threshold limit. Consequently, the Civil Miscellaneous Appeal was dismissed on the grounds of low tax effect, with the substantial question of law left open. The Revenue was granted liberty to file a petition if the tax effect exceeded the threshold limit to have the matter heard and decided on merits. This detailed analysis covers the key issues involved in the legal judgment delivered by the Madras High Court.
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