2022 (11) TMI 796 - HC - Central Excise

Seeking recall of the order - applicability of monetary limit on issues related to refund - appeal closed on the ground that the tax effect was below the threshold limit prescribed in the instruction dated 22.08.2019 issued by the Central Board of Indirect Taxes and Customs - HELD THAT - The Board, in its communication dated 19.10.2022 has indicated, that an SLP should not be filed, having regard to the monetary limit, keeping the question of law open in terms of Section 35R of the Central Excise Act, 1944. Since the Board has declined to file an SLP, surely, this application for recall cannot lie - we are not inclined to entertain the recall application. Application dismissed.

Summary

Issues:
1. Application for recall of order dated 24.08.2022 due to tax effect below threshold limit.
2. Interpretation of circular regarding monetary limits for appeals concerning interest on refunds.

Analysis:
1. The appellant filed an application seeking recall of the order dated 24.08.2022, which closed the appeal due to the tax effect being below the prescribed threshold limit of Rs.1,00,00,000 as per the circular issued by the Central Board of Indirect Taxes and Customs. The appellant accepted that the tax effect was below the limit but argued that the circular should not apply to matters related to interest on refunded amounts. The circular clarified that monetary limits also apply to cases of refund.

2. The case involved the respondent seeking a refund of Rs.25,00,000 deposited during investigation along with interest and the amount from a bank guarantee. After a series of adjudication proceedings and appeals, the Tribunal directed the payment of interest at 12% per annum to the respondent. The appellant appealed against the order on the grounds of interest rate, but the appeal was closed as the quantum of interest fell below the threshold limit for filing an appeal.

3. The High Court dismissed the application for recall, noting that the Board declined to file a Special Leave Petition (SLP) due to monetary grounds, keeping the question of law open. The Court agreed with the respondent that the circular encompassed the aspect of interest payable on refunds, as highlighted in the relevant paragraphs of the circular dated 17.08.2011. Therefore, the Court refused to entertain the recall application, and it was dismissed.