Facts of the Case

The present appeals were filed by the Revenue against 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 challenged the maintainability of these appeals on three preliminary grounds:

  1. The appeal may not lie before the High Court under Section 35G.
  2. The tax effect involved was below the prescribed monetary threshold.
  3. The appeals were filed with substantial delay beyond the limitation period.

Issues Involved

  1. Whether delay in filing appeals by the Revenue could be condoned considering 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 in view of statutory limitations under Section 35G.

Petitioner’s Arguments (Revenue)

  • The delay in filing appeals should be condoned by relying upon the Supreme Court’s suo motu orders extending limitation due to COVID-19.
  • The period between 15.03.2020 to 02.10.2021 should be excluded while computing limitation.

Respondent’s Arguments (Assessee)

  • The appeals are barred by limitation and filed much beyond the prescribed period.
  • The tax effect involved is below the threshold limit prescribed under CBIC circular dated 22.08.2019.
  • Appeals falling under exclusionary clauses of Section 35G should not be entertained by the High Court.

Court’s Findings / Judgment

  • The Court condoned the delay, noting that a substantial portion of delay fell within the COVID-19 period covered by Supreme Court limitation extension orders.
  • However, the Court held:
    • CBIC circulars prescribing monetary limits are binding on the Revenue.
    • The tax effect in each appeal was below the prescribed threshold limit.
  • Consequently:
    • The appeals were dismissed on the ground of low tax effect without examining other issues.
  • The Court further directed:
    • The Revenue to expedite refund to the assessee along with statutory interest.

Important Clarifications by the Court

  • Monetary limit circulars are mandatory and binding on the Department.
  • Even if delay is condoned, appeals cannot survive if they violate monetary threshold limits.

Courts may avoid adjudication on merits where dismissal is justified on preliminary grounds.

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

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