2016 (12) TMI 1070 - HC - Service Tax

Maintainability of appeal - monetary limit - Held that - an appeal shall not be filed before the High Court in case where the monetary limits is less than ₹ 15,00,000/- - In the instant case, tax effect is less than the limit of ₹ 15 lakhs prescribed in the said Instructions - appeal not maintainable.

Summary

Issues:
1. Interpretation of Rule 1(e) of Cenvat Credit Rules, 2004 regarding TR-6 challan as a prescribed document for availing Cenvat Credit.
2. Eligibility of TR6/GAR-7 challans for availing Cenvat Credit under Notification No.28/2005 CE (NT) dated 07.06.2005.

Analysis:

1. The appeal before the Madras High Court was filed by the Commissioner of Central Excise, Chennai, challenging the Final Order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai. The appeal raised two substantial questions of law for consideration. Firstly, whether the Tribunal should have considered the amendment to Rule 1(e) of Cenvat Credit Rules, 2004, through Notification No.28/2005 dated 07.05.2005, which prescribed TR-6 challan as a document for availing Cenvat Credit effective from 16.06.2005. Prior to this amendment, TR-6 challan was not a prescribed document. Secondly, the Tribunal was questioned on whether the credit taken from TR6/GAR-7 challans, which evidence the payment of service tax by the person liable to pay under Section 2(1)(b)(v) of Service Tax Rule, 1994, was irregular before 16.06.2005 under Notification No.28/2005 CE (NT) dated 07.06.2005.

2. The learned Standing Counsel for the Department sought to withdraw the appeal based on the Instructions issued by the Ministry of Finance Department of Revenue Central Board of Excise & Customs, which provided monetary limits for filing appeals by the Department before the CESTAT/High Courts and Supreme Court. Even though substantial questions of law were present, the value involved in the appeal was considered insignificant in light of the monetary limits set by the Ministry of Finance. The Instructions dated 14.12.2015 specified that appeals shall not be filed before the High Court if the tax effect is less than ?15,00,000. In this case, the tax effect was below the prescribed limit, leading to the dismissal of the appeal as not pressed. The Court decided to preserve the substantial questions of law for determination in a more suitable case, without imposing any costs.