Case Law Details

Case Name : Commissioner of Central GST Vs Adhikari Engineering (Karnataka High Court)
Appeal Number : C.E.A. No. 36 of 2019
Date of Judgement/Order : 19/03/2021
Related Assessment Year :

The Commissioner of Central GST Vs Adhikari Engineering (Karnataka High Court)

At the outset, learned counsel appearing for the respondent has argued before this Court that the monetary limit involved is less than Rs.1 crore and in the light of the circular issued by the Central Board of Direct Taxes dated 22.08.2019, the appeal itself is not maintainable. He has further stated that the circular dated 22.08.2019, is an extension of the earlier circular dated 17.08.2011, wherein, the limit was Rs.10 lakh.

He has stated in the present appeal that the monetary limit is approximately Rs.26 lakh and the constitutional validity of any provisions of the Act or the Rule is not under challenge. Therefore, his contention is that the appeal be dismissed accordingly.

This Court after hearing the learned counsel for the parties is of the opinion that in the present appeal there is no challenge to the constitutional validity of any provision of the Act or the Rule and therefore, as the monetary limit involved is less than Rs.1 crore, the appeal is not maintainable.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Regard being had to the similitude controversy involved in both the cases, they were heard analogously together and common judgment is being passed in both the cases.

2. The facts in Central Excise Appeal No.65/2018 are narrated as under:

The present appeal has been filed by the Revenue against the order passed by the Customs, Excise and Service Tax Appellate Tribunal in Appeal No.E/20523/2018 – SM.

3. At the outset, learned counsel appearing for the respondent has argued before this Court that the monetary limit involved is less than Rs.1 crore and in the light of the circular issued by the Central Board of Direct Taxes dated 22.08.2019, the appeal itself is not maintainable. He has further stated that the circular dated 22.08.2019, is an extension of the earlier circular dated 17.08.2011, wherein, the limit was Rs.10 lakh. He has drawn the attention of this Court to the part circular dated 17.08.2011. Paragraph No.3 of the circular dated 17.08.2011, read as under:

“3. Adverse judgments relating to the following should be contested irrespective of the amount involved:

(a) Where the constitutional validity of the provisions of an Act or Rule is under challenge.

(b) Where Notification/Instruction/Order or Circular has been held illegal or ultra vires.”

4. He has stated in the present appeal that the monetary limit is approximately Rs.26 lakh and the constitutional validity of any provisions of the Act or the Rule is not under challenge. Therefore, his contention is that the appeal be dismissed accordingly.

5. On the other hand, Sri Vikram Aditya Huilgol, learned counsel appearing for the appellant has argued before this Court that the judgment delivered by the Tribunal is based upon a judgment delivered by the High Court of Gujarat in the case of INDSUR GLOBAL LTD. VS. UNION OF INDIA reported in (2014) 310 ELT 833, wherein, it has held that the payment of excise duty by utilizing the CENVAT credit is not violation of the Rule 8(3A) of the Central Excise Rules, 2002. It is further stated that the aforesaid judgment has been stayed by the Hon’ble Supreme Court and stay is continuing. Therefore, the matter deserves to be remanded to the Tribunal or may be deferred.

6. This Court after hearing the learned counsel for the parties is of the opinion that in the present appeal there is no challenge to the constitutional validity of any provision of the Act or the Rule and therefore, as the monetary limit involved is less than Rs.1 crore, the appeal is not maintainable.

7. Learned counsel appearing for the respondent has drawn the attention of this Court towards the judgment delivered by a Hon’ble Division Bench of the High Court of Gujarat in the case of COMMISSIONER OF C. EX., AHMEDABAD – II VS. PARTH PHARMACHEM INDUSTRIES reported in 2017 (346) E.L.T. 352 (Guj.), wherein it has held as:

“The delay condonation application is filed by the Revenue. In filing review petition, there is a delay of 6 days. We would have readily condoned the same after hearing the other side. However, we also perused the review petition and the ground, on which, the Revenue seeks recall of our order dated 3- 12- 2015 in Tax Appeal No.928 of 2015. Such tax appeal was disposed of on the ground of low tax effect recording that the disputed amount is only Rs.68,630/-. The C.B.E. & C. Circular dated 17-8-2011 would not permit filing of appeals before the High Court involving tax effect of less than Rs. 10 lacs. Review is sought on the ground that this circular provides for certain exceptions, one of them being when the validity of the statute is in question. Admittedly, in the tax appeal, the validity of any statute was not a question. The contention of the Revenue appears to be that the Tribunal had given benefit to the assessee on the basis of invalidation of Rule 8(3A) of Central Excise Rules, 2002. However, this is entirely a different matter and the case, therefore, would not fall under the such exception.

2. In the result, delay condonation application and the review petition both are dismissed.”

The petition preferred by the Department was dismissed in the light of the monetary limit fixed by the circular under reference in the aforesaid case. Against the judgment of the Division Bench, a special leave to appeal was preferred before the Hon’ble Supreme Court in Special Leave to Appeal (C) Nos.CC 19015 – 19016 of 2016, and the Hon’ble Supreme Court has dismissed the special leave to appeal by an order dated 17.10.2016. Therefore, taking into account the aforesaid judgment, the circular dated 22.08.2019, read with circular dated 17.08.2011, as the case does not fall under the exceptional case i.e., Rule 8(3A) of the Central Excise Rules, 2002. The appeal is accordingly dismissed.

8. In the light of the judgment delivered in the aforesaid appeal, the other connected case i.e., in Central Excise Appeal No.36/2019 also stands dismissed.

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