MONETARY LIMITS FOR FILING APPEALS BY DEPARTMENT

[Dr. Sanjiv Agarwal]

Central Board of Excise and Customs has issued Instructions vide F. No. 390/Misc/163/2010-JC dated 20.10.2010 providing monetary limits for filing appeals by the Department before Tribunal shall not be filed where the duty involved or total revenue including fine and penalty is ₹ 1 lakh and below. In case of high courts, appeals should not be filed in cases where the duty involved or total revenue including fine or penalty is ₹ 2 lakh and below. While deciding the thresholds, the duty involved shall be the decisive element.

Adverse judgments relating to the following should be contested irrespective of the amount involved:

(a) Where the constitutional validity of the provisions of an Act or Rule is under challenge.

(b) Where notification/instruction/order or Circular has been held illegal or ultra vires.

(c) Where audit objection on the issue involved in a case has been accepted by the Department.

Revision in monetary limits for Appeals to Cestat/Courts

Vide Circular No. M F (DR) F. No. 390/Misc/163/ 2010-SC dated 17.8.2011, the monetary limits for filing departmental appeals have been revised w.e.f. 1.9.2011.

In case of departmental appeals, the monetary limits for filing appeals in various forums has been revised w.e.f. 1-9-2011. While the duty, interest or penalty involved should be minimum ₹ 5,00,000 for appeal to CESTAT, same should be ₹ 10 lakh and ₹ 25 lakh in case of appeal before High Court and Supreme Court, respectively. It has also been clarified that the determinative element for coverage would be duty/tax under dispute’ and that monetary limit would be applicable on the disputed duty and not on total duty demanded in a case. The monetary limit will not apply to cases challenging adverse judgments relating to constitutional validity of provisions of Act or Rule or where Notification, instruction, order or Circular has been held illegal! ultra vires. It would also not apply for application to Revisionary Authority. In cases of audit objections also, the appeals would be subjected to such monetary limits.’

Vide Instruction (F.No. 390/Misc/163/2010-JC) dated 26.12.2014, CBEC has reiterated that appeal is not required to be filed in cases below the prescribed monetary limits (as per Instruction dated 20.10.2010 as modified by Instruction dated 17.08.2011) unless the dispute falls in the two exclusion categories mentioned in para(3) of Instruction dated 17.08.2011. CBEC has further clarified as follows on the issues on which clarification were sought (extracts of Instructions) -

"3. It is hereby clarified that the existing Instruction regarding applicability of monetary limits to cases of recurring nature would continue. Therefore, all cases, including cases of recurring nature, are covered under the Instruction on monetary limits and appeal is not to be filed in such cases except those falling in the two exclusion clauses mentioned above. Even if an appeal is pending in the higher appellate forum, subsequent case of the same party or other party shall not be pursued further in litigation if the case falls below the monetary limit prescribed by the Board.

4. The Instructions mentioned above used the word “case”. However, the same was not defined. The term “case” needs to be interpreted in the context of National Litigation Policy which aims at reduction of litigation. In respect of a composite order which disposes of more than one appeal/SCN and the Department contemplates filing of appeal, every appeal would be a “case” and should be subjected to the threshold limit prescribed. To illustrate, if the Tribunal passes one composite order disposing of more than one appeal filed before it, and if the Department being aggrieved is required to file more than one appeal against the said Tribunal order, then each appeal shall be subject to the monetary limit prescribed.

5. There is no change in the monetary limits prescribed by the Board."

The appeals filed by the Department which are not within the monetary limits are liable to dismissed.