2015 (8) TMI 780 - HC - Customs

High Court upholds Tribunal's refund order, dismisses Revenue's appeal citing Customs Act

The High Court dismissed the Tax Appeal filed by the Revenue challenging a Customs, Excise & Service Tax Appellate Tribunal's order allowing a refund, ... Recovery of Refund – Whether Tribunal was correct in law in allowing appeal of respondent, on ground that show cause notice issued for recovery of refund subsequent to order of Commissioner (Appeals) was barred by limitation – Held that:- as per decision of this Court in case of Commissioner of Central Excise & Customs v. Stovec Industries Ltd., reported in 2013 (1) TMI 72 - GUJARAT HIGH COURT held that in view of instruction dated 17-8-2011, tax appeal involving amount below ₹ 10 lakh was not maintainable and this instruction also applies to pending appeal – Amount in current case being less than ₹ 10.00 Lakh appeal hereby dismissed – Answered in favour of assesse. Issues:1. Interpretation of Section 28 of the Customs Act, 1962 regarding the limitation period for recovery of refund.2. Validity of the show cause notice issued post the order of Commissioner (Appeals).3. Maintainability of the tax appeal based on the amount involved.Analysis:1. The case involved a Tax Appeal filed by the Revenue challenging an order passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) allowing a refund amount. The dispute arose when a show cause notice was issued post the order of the Commissioner (Appeals) for the recovery of the refund amount. The main issue was whether the Tribunal was correct in allowing the appeal of the respondent based on the limitation prescribed under Section 28 of the Customs Act, 1962. The Tribunal confirmed the demand raised in the show cause notice, leading to subsequent appeals and reviews.2. The respondent had filed refund claims which were initially sanctioned by the Deputy Commissioner of Customs. However, the Commissioner (Appeal) reviewed the order and set it aside, leading to further challenges and appeals. The case involved a series of orders, appeals, and reviews regarding the refund amount, ultimately culminating in the appeal before the High Court. The Court had to determine the legality of the show cause notice issued post the order of the Commissioner (Appeals) and its compliance with the relevant legal provisions.3. The High Court, citing a previous decision in the case of Commissioner of Central Excise & Customs v. Stovec Industries Ltd., held that tax appeals involving amounts below a certain threshold were not maintainable as per an instruction dated 17-8-2011. In this case, the amount involved was less than the specified threshold, leading the Court to dismiss the tax appeal as not maintainable. The Court's decision was based on the precedent set by the Division Bench and the applicability of the instruction to the pending appeal, ultimately ruling in favor of the assessee and against the Revenue.This comprehensive analysis of the judgment highlights the key issues surrounding the interpretation of legal provisions, the validity of administrative actions, and the procedural aspects determining the maintainability of the tax appeal based on the amount involved.