CBEC revises Monetary limits for filing appeal - A case of self-aggrandizement?

By Vijay Kumar

ST Vishesh writes -

"The latest CBEC Instruction 390/Misc/163/2010-JC dated 17.12.2015 amending previous instructions dated 17.08.2011 and revising the monetary limit to Rs. 10 lakhs, Rs. 15 lakhs and Rs. 25 lakhs respectively for filing appeal(s) before CESTAT, High Court and Supreme Court was what made me do some out-of-the-box thinking.

In a one-liner instruction, CBEC has clarified vide its letter 390/Misc/163/2010-JC dated 01.01.2016 that the said revised monetary limits would be applicable to all pending appeals in the CESTAT / High Court.

The earlier Instruction 390/Misc/163/2010-JC dated 17.08.2011 prescribed the monetary limit for filing appeal before the CESTAT, High Court and Supreme Court as Rs.5 lakhs,Rs.10 lakhs and Rs.25 lakhs respectively.

This was a quantum jump from the first instruction F.No.390/Misc./163/2010-JC, dated 20.10.2010 which fixed the monetary limit as Rs.1 lakh [CESTAT], Rs. 2 lakhs [High Court] and Rs.5 lakhs for filing appeal before the Supreme Court.

The monetary limits are tabulated below for quick reference -

An interesting fact is that the File no. has remained unchanged all these years, right from the year 2010 to 2016 and some question the authenticity. Is this the way the communications are issued by the Board office - certainly not! But then, who will take the pain of creating a new File number and a file…

That aside, DDT 2762 dt. 11.01.2016 has reported that as on 1.12.2015, there were 98817 regular appeals and 2389 stay matters pending before the CESTAT. Guesstimate would suggest that out of these the Department would be responsible for at least 33.33% of the appeals, which, as the normal saying by critics goes would be "frivolous".

Pursuant to the clarification dated 01.01.2016, it is quite possible that ‘excepting the exceptions' mentioned in the instructions where appeals were required to be filed irrespective of the monetary limits, many appeals filed by the department would be dismissed by the CESTAT in the days to come.

Interestingly this clarification applies only to the appeals filed by the Department before the CESTAT and High Courts. What about the appeals filed before the Supreme Court? Perhaps the department is scared to talk about them!

But then, is such a ploy to reduce the staggering number of cases pending before the CESTAT or for that matter the High Courts purely driven by a media frenzy or the Make in India or Ease of Business jugglery? I think it is so.

I personally am quite against such "instructions" which "devalue the rupee".

Permit me to explain in the following fashion.

When queried "Inflation impact - How much is Rs.100/- from then worth now?", the ever-dependable search engine produced some interesting results and which throws the following numbers -

So, if the Revenue had filed an appeal in the year 2000, each Rs.100/- is worth Rs.226/- now & if the appeal is of year 2002 each Rs.100/- is worth Rs.204/- today.

Consequently, an appeal filed in the year 2000 in CEGAT (now CESTAT) involving Rs.5 lakhs is worth Rs.11,30,000/- today and similarly if a Rs.10 lakhs appeal was filed before the High Court in the year 2002, it is worth Rs.20,40,000/- today!

Suffice to say that if the above "conversion" rates are applied, not all the appeals filed in the earlier years would be ousted by the revised instruction dated 17.12.2015. Shouldn't this also be a yardstick to decide which appeals should survive?

Nonetheless, what interests me more is the relevant section 35R of CEA, 1944/s.131BA of Customs Act, 1962 from which the power flows to the Board to fix such monetary limits for filing appeals. The section speaks of "fixing monetary limits for filing appeals" but does not give any leverage to the Board of "making them operate retrospectively" and if this be so can Board satiate the thirst of the campaigners of ease of doing business by proceeding to act illegally?

In case the CBEC is on an overdrive to make the public believe that they are for the Taxpayer then they should also think of those unfortunate departmental officers against whom disciplinary proceedings were initiated on the ground of causing "loss to Revenue" and where the amounts involved were a "pittance" by today's standards!

I hope DDT carries my point of view. Keeping my fingers crossed!"