2024 (5) TMI 579 - HC - Customs

Maintainability of Appeal - monetary limit for appeal to the High Court - Notification/Instructions amending the monetary limit - Redemption of fine u/s 125 - Penalty - HELD THAT - By Instructions dated 20.10.2010, the Central Board of Indirect Taxes had fixed a monetary limit below which appeals were not to be filed by the department before the Tribunal, High Court or the Supreme Court, as the case may be. The monetary limit has undergone increase from time to time. The latest Instructions dated 02.11.2023 prescribes a monetary limit of Rs. 1 crore for appeals to the High Court. The Instructions further state that process has to be initiated for withdrawal of pending cases which are below the monetary limit. Thus, the issue involved is with regard to redemption fine of Rs. 40 lakhs and penalty of Rs. 20 lakhs which cumulatively is below the threshold limit. Consequently, we are of the view that the appeal being below the monetary limit as prescribed by the Instructions is not maintainable and is accordingly dismissed on the ground of low tax effect.

Summary

Issues involved: Appeal against reduction of redemption fine and penalty under Sections 125 and 112-A of the Customs Act, 1962. Jurisdiction of the Tribunal to set aside Order-in-Original not subject matter of appeal. Applicability of monetary limits for filing appeals by the department before higher courts.

Issue 1: Tribunal's authority to set aside Order-in-Original
The appellant challenged the Tribunal's decision to set aside the Order-in-Original, arguing that the Tribunal exceeded its jurisdiction by not limiting its decision to the appeal before it. The appellant contended that the Tribunal should have upheld the Order-in-Appeal and not set aside the Order-in-Original.

Issue 2: Applicability of monetary limits for filing appeals
The respondent raised an objection regarding the total sum involved in the appeal, which amounted to Rs. 60 lakhs. Citing relevant Instructions dated 02.11.2023, 17.08.2011, and 20.10.2010, the respondent argued that the appeal should be dismissed due to falling below the monetary limit set by the Central Board of Indirect Taxes for filing appeals before higher courts.

Judgment:
The High Court dismissed the appeal, citing the Instructions dated 20.10.2010 and the subsequent Instructions increasing the monetary limit for appeals. The Court noted that the issue of redemption fine and penalty amounting to Rs. 60 lakhs fell below the prescribed threshold limit. Therefore, the appeal was deemed not maintainable due to the low tax effect and was accordingly dismissed.