Monetary Limit Of Rs. 1 Crore For Appeals To High Court; Delhi High Court Dismisses Dept's Appeal

The Delhi High Court has dismissed the challenging redemption fine of Rs. 40 lakhs, citing instructions issued by the Central Board of Indirect Taxes and Customs (CBIC), which set the monetary limit of Rs. 1 crore for appeals to the high court.

The Bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja has observed that the issue involved is with regard to the redemption fine of Rs. 40 lakhs and penalty of Rs. 20 lakhs, which cumulatively are below the threshold limit. The bench was of the view that the appeal being below the monetary limit as prescribed by the instructions was not maintainable.

The appellant/department has challenged the order dated March 2, 2022, by which the Customs Excise and Service Tax Appellate Tribunal has dismissed the appeal of the department. The department had impugned an Order-in-Appeal dated March 8, 2021. The assessee had filed the appeal challenging the Order-in-Original, by which a redemption fine of Rs. 40 lakhs was imposed on the respondents/assessee under Section 125 of the Customs Act, 1962, besides a penalty of Rs. 20 lakhs under Section 112A.

By the Order-in-Appeal, the redemption fine was reduced from Rs. 40 lakhs to Rs. 2.25 lakhs, and the penalty was also reduced from Rs. 20 lakhs to Rs. 2.25 lakhs.

The appellant contended that the Tribunal has erred in setting aside the order-in-original, as the order-in-original was not the subject matter of the appeal before the Tribunal. The Tribunal could have at best dismissed the appeal of the department, maintained the Order-in-Appeal, and could not have set aside the Order in Original.

The assessee contended that the appeal entails a total sum of Rs. 60 lakhs, i.e., Rs. 40 lakhs, which were imposed as a redemption fine and Rs. 20 lakhs as a penalty by the Order-in-Original. As such, the appeal is liable to be dismissed in view of Instructions dated November 2, 2023, read with Instructions dated August 17, 2011, and Instructions dated October 20, 2010, on the subject “Reduction of Government Litigation: Providing Monetary Limits for Filing Appeals by the Department Before the CESTAT, High Courts, or Supreme Court,” read with the subsequent Notification or Instructions amending the monetary limit.

By instructions dated October 20, 2010, the Central Board of Indirect Taxes had fixed a monetary limit below which appeals were not to be filed by the department before the Tribunal, High Court, or Supreme Court, as the case may be. The monetary limit has undergone an increase from time to time. The latest instructions, dated November 2, 2023, prescribe a monetary limit of Rs. 1 crore for appeals to the High Court. The instructions further state that the process has to be initiated for the withdrawal of pending cases that are below the monetary limit.

The court dismissed the appeal filed by the department on the ground of a low tax effect.

Counsel For Appellant: Anurag Ojha

Counsel For Respondent: Satish Chaudhary

Case Title: The Principal Commissioner Of Customs, ACC Imports New Delhi Versus M/S. Salasar Synthetics

Citation: 2024 LiveLaw (Del) 593

Case No.: CUSAA 135/2022 & CM APPL. 41288/2022

Click Here To Read The Order