CESTAT dismisses Service Tax Dept Appeal Concerning CBIC Guidelines on Fixing Monetary Limit [Read Order]

The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) dismissed the appeal filed by the Service Tax Department concerning the Central Board of Indirect Taxes and Customs (CBIC) guidelines on fixing the monetary limit for filing appeals.

GEW Electronics Pvt. Ltd.,the respondent-assessee, was involved in an appeal where the Revenue filed a miscellaneous application seeking permission to withdraw the appeal under the Litigation Policy.

The Revenue's decision to withdraw the appeal was based on a recent instruction issued by the Central Board of Indirect Taxes & Customs (CBIC) under Instruction F.No.160390/20/2024-JC-CBEC dated 06.08.2024, which introduced a new monetary threshold of Rs. 60 lakhs for filing appeals before CESTAT. According to this instruction, the Department must withdraw appeals where the amount involved is less than Rs. 60 lakhs.

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The CBIC issued Order CBIC-160390/20/2024-JC-CBEC on August 6, 2024, regarding the reduction of government litigation by raising the monetary limits for filing appeals in legacy Central Excise and Service Tax cases. Using powers under Section 35R of the Central Excise Act, 1944, and Section 83 of the Finance Act, 1994, the CBIC established new limits: Rs. 60 lakh for CESTAT, Rs. 2 Crore for the High Court, and Rs. 5 Crore for the Supreme Court. These limits aim to reduce unnecessary appeals by the Department.

After hearing submissions from both sides, the tribunal acknowledged that the amount in dispute in the present appeal was below the Rs. 60 lakhs threshold. The bench noted that the Litigation Policy, as outlined in the CBIC instruction, was specifically intended to reduce the number of appeals filed by the Department in cases where the monetary value was not substantial enough to warrant continued litigation. This policy aims to streamline the appeals process and alleviate the burden on the judicial system, allowing the Department to focus its efforts on more significant cases.

In light of these considerations, the tribunal found it appropriate to allow the Revenue’s request for withdrawal and emphasized that the instruction was binding on all field formations of the Department, and any pending appeals within the specified monetary limit were to be withdrawn promptly in line with the CBIC’s directives.

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The two member bench comprising D.M Misra(Judicial Member) and R Bhagya Devi(Technical Member) found it appropriate to allow the Revenue’s request to withdraw the appeal. Accordingly, the appeal was dismissed as withdrawn. Furthermore, the miscellaneous application filed by the Revenue was also disposed of, effectively concluding the proceedings.

To Read the full text of the Order CLICK HERE

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