2022 (7) TMI 192 - HC - Central Excise

Maintainability of appeal - threshold monetary limit involved in the appeal - HELD THAT - The show-cause notices were contested by the respondent/assessee and the Commissioner of Central Excise passed a common order dated 31 st August, 2006 on all the show-cause notices. As a result the sum total of the total demand made was Rs.1,05,00,205/-. However, as against the said order the assessee preferred five appeals before the Tribunal and the Tribunal by the common order without going into the merits of the matter had merely followed the decision of the Gujarat High Court, in INDSUR GLOBAL LTD. VERSUS UNION OF INDIA 2 2014 (12) TMI 585 - GUJARAT HIGH COURT and allowed the appeals filed by the assessee. As rightly pointed out by Mr. Bhattacharyya, learned Standing Counsel for revenue the decision of the Gujarat high Court in the matter of INDSUR GLOBAL LTD. has been challenged before the Hon ble Supreme Court and the Hon ble Supreme Court has entertained the appeal and granted an order of interim stay. It is required to be considered what has to be done in this appeal even assuming that revenue was successful before the Hon ble Supreme Court and the decision of the Gujarat High Court was reversed and the matter has to be heard, the best that can be done is to remand the matter to the Tribunal to take a decision on merits. This appeal can be disposed of by directing the interest of the revenue by living the questions of law open for adjudication at an appropriate state and an appropriate manner.

Summary

Issues:
1. Delay in filing the appeal.
2. Merits of the appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal.
3. Applicability of the threshold limit on tax effect.
4. Disposition of the appeal on the ground of low tax effect.

1. Delay in filing the appeal:
The High Court acknowledged a delay of 927 days in filing the appeal. Despite not being fully convinced by the revenue's explanation, the Court considered that the appeal could not be pursued due to low tax effect. Consequently, the Court exercised discretion and condoned the delay in filing the appeal.

2. Merits of the appeal against the order of the Customs, Excise and Service Tax Appellate Tribunal:
The appeal was directed against a common order by the Tribunal, which had not decided the matter on merits but followed a decision of the Gujarat High Court. The revenue argued that the total excise duty involved exceeded the threshold limit and raised substantial legal questions. However, since the tax effect in each appeal was below the threshold limit set by the Circular, the Tribunal could not decide on merits. The Court disposed of the appeal on the ground of low tax effect, leaving the questions of law open for adjudication at a later stage.

3. Applicability of the threshold limit on tax effect:
The Court noted that there were five show cause notices issued to the respondent/assessee, each with a specific demand amount. Despite the total demand being significant, the tax effect in each appeal was below the threshold limit. This fact influenced the Court's decision to dispose of the appeal without delving into the merits of the case.

4. Disposition of the appeal on the ground of low tax effect:
Considering the tax effect in each appeal was below the threshold limit, the Court decided to dispose of the appeal by directing the interest of the revenue and leaving the questions of law open for future adjudication. The Court emphasized that even if the revenue were successful in the Supreme Court and the matter returned for consideration, the Tribunal could not decide on merits due to the low tax effect in each appeal. Consequently, the appeal was disposed of based on the ground of low tax effect, with the observations on the validity of certain rules left open for further review.