2015 (1) TMI 1178 - HC - Customs

Maintainability of appeal - Imposition of penalty - Held that - In this Tax Appeal the CESTAT has allowed the appeal of the Revenue and set aside the penalty of ₹10,000 imposed on the assessee - A Division Bench of this Court in the case of COMMISSIONER OF CENTRAL EXCISE & CUSTOMS V. STOVEC INDUSTRIES LTD., reported in 2013 (1) TMI 72 - GUJARAT HIGH COURT held that in view of instruction dated 17.8.2011, tax appeal below ₹ 10 lakh is not maintainable and this instruction also applies to the pending appeal. Following the aforesaid decision of the Division Bench, we dismiss this tax appeal as not maintainable. - Decided against Revenue.

Summary

Issues:
1. Onus of proving seized diamonds were of smuggled nature
2. Challenge to penalty imposed on the assessee
3. Maintainability of the tax appeal below Rs. 10 lakh

Analysis:

1. The main issue in this case revolved around the onus of proving that the seized diamonds were of smuggled nature. The Tribunal had held that the department had the burden of proof in this regard due to the denotification of the seized diamonds from the provisions of the Customs Act. The court had to determine whether this decision was justified in the given circumstances.

2. The Tax Appeal involved a challenge to the penalty of Rs. 10,000 imposed on the assessee. The CESTAT had partly allowed the appeal of the Revenue by setting aside this penalty. Subsequently, the Revenue challenged the CESTAT's order in this tax appeal, leading to a detailed examination of the penalty imposition and its validity.

3. A significant aspect of the judgment related to the maintainability of the tax appeal below Rs. 10 lakh. Referring to a previous decision in the case of COMMISSIONER OF CENTRAL EXCISE & CUSTOMS V. STOVEC INDUSTRIES LTD., the court noted that as per an instruction dated 17.8.2011, tax appeals below Rs. 10 lakh were not maintainable. Consequently, the court dismissed the tax appeal in question on the grounds of maintainability, favoring the assessee and ruling against the revenue.

In conclusion, the judgment addressed multiple issues, including the burden of proof regarding seized diamonds, the challenge to the penalty imposed on the assessee, and the maintainability of the tax appeal below Rs. 10 lakh. The court's decision provided clarity on these matters, citing relevant legal precedents and instructions to support its conclusions.