How instructions issued by important Government of India authorities are put on the shelf and they end up gathering dust gets amply reflected by the fact that the Central Board of Excise & Customs (CBEC) had to send instructions earlier this month to all Chief Commissioners of Central Excice, Customs and Service Tax to remind them that SLPs before Supreme Court should not be filed in cases where revenue is below the threshold limit as specified through Board’s instructions issued earlier [F.No.390/Misc./163/2010-JC dated 17 August 2011] to define the monetary limits for filing of appeals before CESTAT, High Court and the Supreme Court.
The CBEC Instructions of 17 August 2011 came into force on 1 September 2011.
CBEC Director (Legal) Rajendra Kumar, shot a letter on 15 May to all Chief Commissioners of Central Excice, Customs and Service Tax telling them that the Board has been receiving proposals for filing of SLPs against High Court orders in Supreme Court from various field formations wherein the amount involved happens to be below the latest threshold limit as prescribed in the 17 August 2011 instructions.
The field bosses have been told by CBEC – through Rajendra Kumar’s letter – that the matter has been examined and the Board has decided that no SLP against the High Court’s order can be filed before the Supreme Court in case the amount involved is below the threshold limit as prescribed in the 17 August 2011 instructions, except in two categories of cases:
a) Where the constitutional validity of the provisions of an Act or Rule is under challenge; and
b) Where Notification/Instruction/Order or Circular has been held to be illegal or ultra vires.
There was zero ambiguity in the CBEC instruction of 17 August 2011. It clearly stated:
“For ascertaining whether a matter would be covered within or without the aforementioned limits, the determinative element would be duty/tax under dispute. To illustrate it further in a case involving duty of Rs. 5 lakhs or below with equal penalty and interest, as the case may be, no appeal shall be filed in the Tribunal. Similarly, no appeal shall be filed in the High Courts if the duty involved does not exceed Rs.10 lakhs with or without penalty and interest. Further, the Commissionerates shall not send proposal to the Board for filing Civil Appeal or Special Leave Petition in the Supreme Court in a case involving duty up to Rs.25 lakhs, whether with penalty and interest or otherwise. However, where the imposition of penalty is the subject matter of dispute and the said penalty exceeds the limit prescribed, then the matter could be litigated further. Similarly, where the subject matter of dispute is the demand of interest and the amount of interest exceeds the prescribed limit, then the matter may require further litigation.
The 2011 instructions, in the first instance, while prescribing the limits for filing SLP, already spelled out in clear terms: “where the subject matter of dispute is the demand of interest and the amount of interest exceeds the prescribed limit, then the matter may require further litigation, adverse judgments relating to the following should be contested irrespective of the amount involved:
a) Where the constitutional validity of the provisions of an Act or Rule is under challenge. and
b) Where Notification/ Instruction/ Order or Circular has been held illegal or ultra vires
To reduce the number of Government litigation before CESTAT/High Courts and Supreme court, monetary limits were fixed for filing appeals and the field foramtions were instructed in this egard by CBEC in August 2011. The monetary limit fixed for CESTAT is Rs.5,00,000. For High Courts it is Rs.10,00,000 and for Supreme Court Rs.25,00,000
The prevailing confusion at the level of Commissionerates dealing with Customs, Central Excise and Service Tax in a matter that was already resolved through instructions passed in August 2011 puts a question mark on the efficiency and working of the field formations reporting to the CBEC.