2015 (7) TMI 142 - HC - Service Tax

Maintainability of appeal - photography service - exemption under Notification No.12/2003-ST dated 20.06.2003 - Monetary limit - Held that - It is seen from the records that the adjudicating authority initially imposed ₹ 52,417/- as service tax with applicable interest and penalty equivalent to the demand of ₹ 52,417/-. Therefore, it is very clear from the records that the monetary limit having been fixed at ₹ 2 Lakhs, even as per the order of the Adjudicating Authority, the interest and penalty being less than ₹ 2 Lakhs, the appeal is not maintainable. - Decided against Revenue.

Summary

Issues:
1. Jurisdiction of the Customs Excise and Service Tax Appellate Tribunal in setting aside the Revision Order passed by the Commissioner.
2. Imposition of penalty under Section 76 of the Finance Act, 1994 by the Commissioner.

Analysis:
1. The case involved a dispute where the second respondent, engaged in photography services, was alleged to have undervalued taxable services, leading to a demand for service tax, interest, and penalty. The Adjudicating Authority confirmed the demand and imposed penalties. Subsequently, the Commissioner initiated review proceedings under Section 84 of the Finance Act, 1994, and imposed penalties. The Tribunal set aside the revision order, citing that the Commissioner should not impose higher penalties when the dispute is pending before the Appellate Commissioner. The High Court was approached by the Revenue challenging the Tribunal's decision.

2. The second respondent raised a preliminary objection regarding the maintainability of the appeal based on the Government's litigation policy. The policy set a monetary limit for filing appeals, and since the duty involved in the present case was below the specified limit, the second respondent argued that the appeal was not maintainable. The High Court, after considering the arguments, found that the monetary limit set by the policy was indeed applicable in this case. As the interest and penalty imposed were below the specified limit, the appeal was dismissed as not maintainable, in accordance with the Government's circular.

In conclusion, the High Court dismissed the appeal filed by the Revenue based on the Government's litigation policy setting a monetary limit for filing appeals. The Court found that the interest and penalty imposed were below the specified limit, making the appeal not maintainable as per the circular. The Court did not delve into the merits of the questions of law raised, emphasizing the applicability of the circular in determining the maintainability of the appeal.