2024 (12) TMI 300 - HC - Customs

Maintainability of the appeal under the Circular setting monetary limits for filing appeals before CESTAT, High Courts, and Supreme Court - Circular 390/Misc./30/2023-JC dated 2nd November, 2023 - HELD THAT - First of all, the intent and purpose of the Circular is very plain. Where realisation of duty and other levies are involved, the Government would only challenge any adverse order, if on success in the proceedings, it would be able to realize an amount equal to or above the threshold limit indicated in the notification. Any realization below the threshold limit did not seem to have been considered significant by the Government. This notification clearly would not cover cases of smuggling where orders for confiscation and imposition of fine, penalty etc. are provided, without any right given to the delinquent to redeem the goods upon payment of duty, penalty etc. This is a case where no such right has been given. Therefore, if the revenue succeeds the order-in-original is likely to be restored resulting in absolute confiscation of the goods along with other penalties. If the respondents succeed, it would result in affirmation of the order of the Tribunal. So if one possible result is absolute confiscation of the goods without any right of redemption on payment of duty, penalty etc. there is no question of the appeal being dismissed on the ground that the duty payable would be less than Rs.1 crore. The point of maintainability does not succeed and it is hereby rejected - List the appeal and the application for admission on 5th December, 2024.

Issues:
Maintainability of the appeal under the Circular setting monetary limits for filing appeals before CESTAT, High Courts, and Supreme Court.

Analysis:
The judgment addressed the issue of the maintainability of an appeal brought before the High Court under a Circular issued by the Central Board of Indirect Taxes and Customs. The Circular set monetary limits below which appeals shall not be filed in the High Court. The Circular specified a monetary limit of Rs. 1 crore for appeals before the High Court. The respondents argued that the appeal was not maintainable under the Circular as the duty payable, in this case, would be less than Rs. 1 crore. However, the court examined the intent and purpose of the Circular, emphasizing that the government would challenge adverse orders only if the amount involved meets or exceeds the specified threshold limit. The court clarified that cases involving smuggling and confiscation orders without the right of redemption were not covered by the Circular.

The court further analyzed the specific case at hand, where the order-in-original resulted in the confiscation of goods. The court highlighted that the potential outcomes of the appeal could either lead to the restoration of the original order, including confiscation, or affirm the decision of the Tribunal for the release of goods to the respondents. The court emphasized that if the revenue succeeds, it would result in absolute confiscation of the goods without any redemption rights. Therefore, the court concluded that the appeal could not be dismissed on the grounds that the duty payable was less than Rs. 1 crore, as the potential consequences of the appeal were significant and beyond mere monetary considerations.

In conclusion, the court rejected the argument regarding the maintainability of the appeal under the Circular and scheduled the appeal and application for admission on a specific date. The judgment provided a detailed analysis of the Circular's application, the specific case facts, and the implications of the potential outcomes on the maintainability of the appeal before the High Court.

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