Facts of the Case

The present appeals were filed by the Revenue challenging a common order dated 01.08.2018 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in multiple service tax appeals.

The respondent/assessee raised preliminary objections regarding:

  1. Maintainability of appeal before the High Court under Section 35G,
  2. Low tax effect being below the prescribed monetary threshold, and
  3. Delay in filing the appeals beyond limitation.

The Revenue attempted to justify the delay by relying on the Supreme Court’s suo motu orders extending limitation during the COVID-19 pandemic.

Issues Involved

  1. Whether delay in filing the appeal could be condoned in light of COVID-19 limitation extensions.
  2. Whether appeals are maintainable when the tax effect is below the monetary threshold prescribed by CBIC circulars.
  3. Whether the High Court should entertain the appeal under Section 35G of the Central Excise Act.

Petitioner’s (Revenue) Arguments

  • The delay in filing appeals should be condoned by applying the benefit of the Supreme Court’s orders in In Re: Cognizance for Extension of Limitation due to COVID-19 disruptions.
  • The Revenue sought adjudication of the appeal on merits despite procedural objections.

Respondent’s (Assessee) Arguments

  • The appeals were barred by limitation and filed with substantial delay.
  • The tax effect was below the prescribed monetary limit, making the appeal non-maintainable as per binding CBIC circulars.
  • Appeals under Section 35G may not be maintainable and may lie before the Supreme Court.

Court’s Findings / Order

  • The Court condoned the delay, considering that a substantial portion of the delay fell within the COVID-19 period covered by Supreme Court orders.
  • However, the Court held that:
    • CBIC circulars prescribing monetary limits are binding on the Revenue, and
    • Since the tax effect in each appeal was below the prescribed threshold, the appeals were not maintainable.
  • Consequently, the Court dismissed all appeals.
  • Additionally, the Court directed that:
    • The refund due to the assessee be expedited, along with applicable statutory interest.

Important Clarifications

  • Even if delay is condoned, appeals cannot survive if they violate monetary limit circulars.
  • CBIC circulars are binding on the Revenue authorities, and courts will enforce them strictly.
  • The judgment reinforces litigation management policy to reduce unnecessary tax litigation.
  • Refund delays by Revenue were also noted and directions issued for expeditious payment.

Link to download the order -  https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:3168-DB/RAS18082022SERTA22022_205603.pdf

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