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2024 Supreme(Online)(GUJ) 21815
HIGH COURT OF GUJARAT
MR. JUSTICE BHARGAV D. KARIA, MR. JUSTICE NIRAL R. MEHTA, JJ
THE COMMISSIONER OF CENTRAL EXCISE AHMEDABAD - I – Appellant
Versus
SINHAL BROTHERS – Respondent
R/TAX APPEAL NO. 884 of 2007 With R/TAX APPEAL NO. 885 of 2007
Tax appeals are maintainable only if they involve constitutional validity or challenge to the legality of Notifications, which was not established in this case.
Headnote:(A) Central Excise Act, 1944 - Section 3A and Section 35R - Tax Appeals - Interpretation of Notifications Nos. 41 and 42 of 1998 regarding the Compounded Levy Scheme - The respondent, being an independent processor, is not entitled to the benefits under the scheme - Appeals dismissed as they do not meet the criteria for maintainability. (Paras 1, 5, 6)
(B) Maintainability of Appeals - Appeals are maintainable only if they involve constitutional validity or challenge to legality of Notifications/Orders - In the present case, none of the conditions are fulfilled. (Paras 5, 6)
Facts of the case:
The appellant contended that the respondent was not entitled to benefits under the Compounded Levy Scheme due to their status as an independent processor. The appeals arose from a duty levy of Rs.1.30 Crore based on the interpretation of Notifications. (Paras 1, 2)
Findings of Court:
The court found that the appeals were not maintainable as they did not involve any constitutional validity or challenge to the legality of the Notifications. (Paras 5, 6)
Issues: The main issue was whether the appeals were maintainable under the provisions of the Central Excise Act and the relevant Notifications. (Paras 5, 6)
Ratio Decidendi: The court ruled that appeals are maintainable only if they involve constitutional validity or challenge to the legality of Notifications, which was not the case here. (Paras 5, 6)
Result: Appeals dismissed.
| Table of Content |
|---|
| 1. interpretation of notifications (Para 1) |
| 2. levy of duty (Para 2) |
| 3. instruction dated 6.8.2024 (Para 3 , 4) |
| 4. relevant extracts from section (Para 5) |
| 5. difficulties faced in implementation (Para 6) |
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Learned advocate Ms.Hetvi Sancheti appearing for the appellant submitted that Tax Appeal No.885 of 2007 refers to the interpretation of the Notification Nos.41 of 1998 and 42 of 1998, both dated 10.12.1998 and the respondent being an independent processor was not entitled to the benefits of the Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 , as the respondent had installed the Hot Air Stenter and was an independent processor falling within the purview of Section 3A of the Central Excise Act, 1944 .
2. It was submitted that Tax Appeal No.884 of 2007 is arising from the levy of duty of Rs.1.30 Crore on the basis of the order passed by the Authorities while interpreting the provision of the aforesaid Notifications. It was, therefore, submitted that she has instructions to proceed with the matter, in spite of there being the Instruction F.No.390/Misc./ 163/2010-JC, dated 17.8.2011 read with Instruction No.CBIC- 160390/20/2024-JC-CBEC dated 6.8.2024 wherein, the monetary limit has been increased to Rs.2 Crore, which applies to the pending cases, as well.
3. The Instruction dated 6.8.2024 reads as under :
“In exercise of powers conferred by section 35R of the Central Excise Act, 1944 made applicable to Service Tax vide section 83 of the Finance Act, 1994 , and in partial modification of the Board instructions issued from F. No. 390/Misc./ 163/2010-JC dated 17.08.2011, the Central Board of Indirect Taxes and Customs hereby fixes the following monetary limits below which appeal shall not be filed in the CESTAT, High Court and Supreme Court:
| S. No. | Appellate Forum | Monetary limit |
| 1 | CESTAT | Rs. 60 lakh |
| 2 | High Court | Rs. 2 Crore |
| 3 | Supreme Court | Rs. 5 Crore |
2. This instruction applies only to legacy issues i.e., matters relating to Central Excise and Service Tax, and will apply to pending cases as well.
3. Adverse judgements relating to the following should be contested irrespective of the amount involved
-
a. Case where the constitutional validity of the provisions of an Act or Rule is under challenge; or
b. Case where Notification/ Instruction / Order/ Circular has been held illegal or ultra vires.
4. Except for the above, all other terms and conditions of Instructions dated 17.08.2011 stands.
5. Relevant extracts from Section 35R of the Central Excise Act, 1944 are reproduced below for ease of reference-
(2) Where, in pursuance of the orders or instructions or directions, issued under sub-section (1), the Central Excise Officer has not filed an appeal, application, revision or reference against any decision or order passed under the provisions of this Act, it shall not preclude such Central Excise Officer from filing appeal, application, revision or reference in any other case involving the same or similar issues or questions of law.
(3) Notwithstanding the fact that no appeal, application, revision or reference has been filed by the Central Excise Officer pursuant to the orders or instructions or directions issued under sub-section (1), no person, being a party in appeal, application, revision or reference shall contend that the Central Excise Officer has acquiesced in the decision on the disputed issue by not filing appeal, application, revision or reference.
(4) The Commissioner (Appeals) or the Appellate Tribunal or court hearing such appeal, application, revision or reference shall have regard to the circumstances under which appeal, application, revision or reference was not filed by the Central Excise Officer in pursuance of the orders or instructions or directions issued under sub- section (1).
6. Difficulties faced in implementation of these Instructions, if any, may be brought to the knowledge of the Board.”
4. Reference to the Instruction dated 17.8.201
