2019 (3) TMI 1055 - HC - Service Tax

Court dismisses appeal citing Revenue Circular threshold, emphasizing adherence for consistency and public interest

The Commissioner of Central Excise & Service Tax-Large Tax Payer Unit Versus Reliance Industries Ltd.

The Court dismissed the appeal based on the Revenue's Circular setting a monetary limit for pressing appeals in the High Court, as the disputed claim fell ... Monetary amount involved in the appeal - appeal of Revenue before the High Court - Circular of the Revenue bearing F.No.390/Misc./116-2017-JC - Held that:- A Circular issued by the Revenue binds the Revenue but, it may not bind the Court or the assessee. We have here a situation where the Revenue's advocate seeks to disown the Circular and seeks to brush it aside in this case. If such a tend is allowed, in future every matter filed by the Revenue will chart the same course. In every case, the Revenue proposes certain questions and terms them as substantial questions of law. The Revenue's Circular covers this matter - The appeal is dismissed on account of the same. Issues:1. Interpretation of a Circular issued by the Revenue regarding the monetary limit for pressing appeals in the High Court.2. Whether the Circular issued by the Revenue binds the Revenue, the Court, or the assessee.3. Determining the impact of the Circular on the present case and its implications for future appeals.Analysis:1. The judgment involves the interpretation of a Circular issued by the Revenue, which sets a monetary limit of below Rs. 50,00,000 for pressing appeals in the High Court. The appellant in this case submitted that the disputed claim was valued at Rs. 45,17,294 (Service Tax), and a fixed court fee of Rs. 200 was paid on the appeal.2. The assessee's advocate raised an objection citing the Circular, arguing that it binds the Revenue and should prevent the appeal from being pursued. However, the Revenue's advocate contended that despite the Circular, there is no mandate to withdraw the appeal as it raises substantial questions of law. The Court acknowledged the existence of the Circular but emphasized that it may not bind the Court or the assessee.3. The Court highlighted the importance of such Circulars issued by the Revenue to serve the larger public interest. It expressed concern that allowing the Revenue to disown the Circular in this case could set a precedent for future appeals, where every matter filed by the Revenue might follow a similar course. The judgment emphasized the need to adhere to Circulars to maintain consistency and uphold public interest.4. Ultimately, the Court concluded that the Revenue's Circular applied to the matter at hand. As a result, the appeal was dismissed due to the low tax effect. However, the Court kept open the possibility of raising the question proposed by the Revenue in a more appropriate case. The judgment clarified that the appeal was disposed of solely based on the low tax effect and the relevance of the Circular in this specific instance.