Low tax effect litigation policy bars Revenue appeal; Tribunal need not await departmental withdrawal before disposal.

A Revenue appeal was treated as not maintainable where the tax effect fell below the monetary limit set under the applicable litigation policy issued under section 35R, and none of the stated exceptions applied. The Tribunal also noted that it was not required to wait for a departmental withdrawal application before disposing of a listed appeal, because its function is not subject to departmental control. A further ground relating to penalty under section 76 was treated as beyond the scope of the proceedings. The appeal was dismissed for low tax effect, and the cross-objection was disposed of accordingly.

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Issues: Whether the Revenue appeal was liable to be dismissed in view of the low tax effect and the applicable litigation policy, and whether the Tribunal was required to await a withdrawal application from the departmental authorities.

Analysis: The dispute involved a tax effect well below the monetary limit prescribed by the Central Board of Excise and Customs instruction issued in exercise of the power under section 35R of the Central Excise Act, 1944, as made applicable to proceedings under the Finance Act, 1994. The prescribed exceptions to the monetary limit were not attracted. The Tribunal also held that it was not obliged to defer disposal of a listed appeal until the department chose to file a withdrawal application, as the Tribunal is not subject to departmental control in the discharge of its function. The additional ground seeking penalty under section 76 was treated as outside the scope of the proceedings.

Conclusion: The appeal was not maintainable for want of sufficient tax effect and was dismissed. The cross-objection was also disposed of.

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