Reduction of Government litigation - providing monetary limits for filing appeals by Department before CESTAT/High Courts and Supreme Court
THE CBEC is vested with powers to regulate filing of appeals in the Tribunal and the Courts by specifying monetary limit, below which appeal need not be filed.
Section 35R of the CEA, 1944 and section 131BA of the Customs Act, 1962 empowers the Board to do so. The instructions/letter on the subject matter are dated 20/10/2010, 17/08/2011, 02/11/2011 & 03/06/2013.
Sub-Section 3 of Section 35R and Section 131BA provides that if an appeal has not been filed by the Department following Instructions issued for not filing appeal below the monetary limit, no person, being a party in appeal, shall contend that the Department has acquiesced in the decision on the disputed issue by not filing appeal. In effect, the decisions/judgments accepted for reasons of monetary limit do not have precedent value.
It has come to the notice of the Board that while arguing on the legal effect of an order accepted on account of low amount, the Department has failed to emphasize the relevant provisions of Section 35R as above before the Courts/Tribunal.
This is what the Board says -
"In a recent case, the Hon'ble High Court dismissed an order passed by the adjudicating authority and even quashed the Show Cause Notice on the ground that an earlier Tribunal order which had decided the issue was not challenged by the Department. The duty involved in the said case was below the threshold limit prescribed for filing appeal. The plea that non-filing of appeal against the said Tribunal order was on account of low amount and did not have any precedent value in the light of the provisions of Section 35R ibid and that the merits of the case are not finally settled, however, was not pleaded, resulting in two such judgments of the High Court."
Apart from the fact that the Board begins by adverting to "a case”, it ends up by saying that there are "two"such cases but nonetheless fails to disclose which this/these judgments are for the benefit of all concerned! So, also, whether the Department is contemplating filing any SLP against these orders is also not revealed.
Be that as it may, the Board further mentions that the issue involved in the said case was already before the Supreme Court in a Departmental appeal and, therefore, in view of the Board's Circular No. 162/73/95-CX dated 14.12.1995, the Show Cause Notices in question should have been transferred to Call Book awaiting the decision of the higher appellate forum. [ Not having done so, what is the point in mentioning this here !]
And so the Board advises -
"4. In view of the above, the Departmental Counsels and the DRs in the Tribunal must plead that a judgment accepted for reasons of low amount should not be relied upon by the appellate forum and that the Department is at liberty to agitate the issue in subsequent proceedings till the matter is settled on merits. The officers in the field formations are hereby directed to take note of the statutory provisions mentioned in the Para 1 & 2 above and prepare the grounds of appeal / defense in suitable cases quoting the relevant provisions."
Incidentally, the provisions of section 35R(4) mandate the following -
"(4) 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)."
Now, how much regard should be given is another issue with multiple dimensions! And, by the way, just to keep a count, cannot these instructions be given a running serial number?
Instruction dated December 12, 2013