2024 (11) TMI 619 - AT - Customs

Maintainability of appeal before CESTAT on low tax effect - HELD THAT - The amount of duty involved in each of the appeal is below of the threshold limit prescribed in circular dated 02.11.2023 issued by the CBIC wherein it is provided that if the duty amount involved is less than Rs.50 lakhs, then no appeal shall be filed before the CESTAT, and if already filed, the same will be withdrawn by the department. We are of the considered opinion that the present appeals filed by the department are not maintainable in view of the instructions dated 02.11.2023 issued by the Board and consequently we dismiss all these 19 appeals leaving the question of law, if any, open.

Issues Involved:

1. Validity of the enhanced value assessment of imported goods by the customs department.
2. Applicability of monetary limit instructions for filing appeals by the Revenue department.
3. Binding nature of CBIC instructions on the Revenue department.

Detailed Analysis:

1. Validity of the Enhanced Value Assessment:

The primary issue revolves around the customs department's decision to reassess the value of imported goods at a higher rate than the declared transaction value. The importer initially accepted the enhanced value without protest but later contested this assessment. The Commissioner of Customs (Appeals) set aside the reassessment, citing that the assessments were "contrary to law and non-speaking." The Commissioner emphasized that the assessable value should be based on the actual price paid unless it is proven that the price is not the sole consideration or the parties are related. The assessment was deemed arbitrary as it uniformly enhanced values without considering factors like nature, quality, and time, which are essential under Section 14(1) of the Customs Act for duty assessment.

2. Applicability of Monetary Limit Instructions:

The respondent argued that the appeals filed by the Revenue are not maintainable due to the monetary threshold limits set by the Ministry of Finance. According to the National Litigation Management Policy and subsequent instructions, appeals should not be filed if the disputed tax amount is below a specified limit, which was revised to Rs. 50 lakhs for CESTAT as of 02.11.2023. The respondent highlighted that these instructions aim to reduce litigation and streamline processes. The CBIC's instructions are binding under Section 131BA of the Customs Act, which empowers the Board to regulate appeal filings based on monetary limits. The respondent cited several judicial precedents where appeals were dismissed due to low tax effects in adherence to these instructions.

3. Binding Nature of CBIC Instructions:

The respondent further contended that CBIC instructions are binding on the department, and it is not open for the department to disregard these instructions. The instructions issued under Section 131BA have statutory force, as affirmed by various judicial decisions, including those by the Supreme Court and High Courts. The respondent referenced a decision by the Bombay High Court, which emphasized that circulars issued under statutory provisions must be adhered to by the department. The respondent also pointed out that the department's reliance on certain interim orders to justify the appeals was misplaced, as these orders did not consider the binding nature of the CBIC instructions.

Conclusion:

The Tribunal dismissed the appeals filed by the Revenue, citing the non-maintainability of the appeals due to the monetary limits prescribed by the CBIC instructions dated 02.11.2023. The Tribunal reiterated that these instructions are binding on the department and that the appeals involved amounts below the threshold limit of Rs. 50 lakhs, thus falling within the scope of the instructions. The decision leaves the question of law open but underscores the importance of adhering to the monetary limits set to reduce unnecessary litigation.

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