Monetary limit on departmental appeals bars revenue challenge absent a recognised exception, with low tax effect fatal

Departmental appeals under the governing monetary-limit circular are not maintainable where the tax effect falls below the prescribed threshold, unless a recognised exception applies. In this matter, the revenue's appeal arose from a demand and penalty under the Central Excise Act, but the tax effect was only Rs. 3,45,203/-, well below the applicable limit for filing such appeals. No constitutional challenge was involved, and no notification, instruction, order, or circular had been held illegal or ultra vires so as to trigger an exception. The appeal was therefore dismissed for low tax effect, with the result favouring the assessee.

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Issues: Whether the revenue's appeal was maintainable in view of the monetary limit prescribed for departmental appeals, and whether any exception to that limit applied.

Analysis: The appeal arose from a demand and penalty under the Central Excise Act, but the tax effect was only Rs. 3,45,203/-. The applicable circular prescribed a much higher monetary threshold for filing departmental appeals. No issue concerning constitutional validity was involved, and no notification, instruction, order, or circular had been held illegal or ultra vires so as to attract any exception to the monetary limit.

Conclusion: The appeal was not maintainable and was dismissed on the ground of low tax effect, which is in favour of the assessee.

Ratio Decidendi: A departmental appeal below the prescribed monetary threshold is not maintainable unless it falls within a recognised exception expressly carved out in the governing circular.

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