2024 (5) TMI 861 - HC - Customs

Applicability of duty element in determining the threshold limit for filing an appeal - Monetary limit prescribed by the Board for filing an appeal before the High Court - HELD THAT - In the instant case, the determinative factor being the duty element is Rs. 86,34,821/-. Thus, the appeal is clearly covered by the circulars prescribing minimum monetary limit for filing an appeal. The example cited in the circulars as noticed clearly negates the argument of learned counsel for the appellant that cumulatively the amount being more than the threshold limit, the appeal would be maintainable. Hence the same has no merit and cannot be accepted. For the purposes of determining the threshold limit, it would only be the duty element which would be taken into account and the same could not be clubbed with penalty and redemption fine. In cases involving duty, fine, penalty and interest, the decisive element would only be duty. However, in cases where duty is not in issue and only fine and penalty are in issue then they would cumulatively be the decisive factor for determining the applicability of threshold limit. Since the duty element involved in the subject appeal is less than the threshold limit, we are of the view that the appeal would not lie in view of the said instructions. The same is accordingly dismissed on the ground of low tax effect.

Summary

Issues Involved:
The judgment deals with the issue of whether an appeal filed by the Appellant/Principal Commissioner of Customs is maintainable before the High Court based on the monetary limit prescribed by the Central Board of Indirect Taxes and Customs.

Details of Judgment:

Issue 1: Monetary Limit for Filing Appeal
The Appellant challenges the order of the Customs Excise and Service Tax Appellate Tribunal, where the appeal by the Respondents was allowed. The duty involved in the appeal is Rs. 86,34,821, with additional penalties and fines imposed. The dispute arises from the interpretation of the circulars issued by the Board regarding the monetary limits for filing appeals. The Appellant argues that cumulatively, the duty, penalty, and fine exceed the threshold limit, while the Respondents contend that only the duty amount should be considered.

Issue 2: Interpretation of Circulars
The circular dated 20.10.2010 sets the threshold limit for filing appeals based on the duty involved. Subsequent amendments in 2011 and clarifications in 2014 and 2015 introduced exceptions for cases challenging constitutional validity or involving classification and refund issues. The latest circular in 2023 increased the monetary limits for Tribunals, High Courts, and the Supreme Court. The judgment emphasizes that the duty element alone should be considered for determining the threshold limit, excluding penalties and fines unless duty is not in dispute.

Conclusion:
The Court holds that the appeal does not meet the prescribed monetary limit based on the duty element, as the duty involved is below the threshold. The judgment dismisses the appeal on the grounds of low tax effect, emphasizing that only the duty amount should be considered for determining the threshold limit, not penalties or fines.