2021 (12) TMI 76 - AT - Service Tax

Revenue's appeal dismissed for Service Tax below Rs. 50 lakhs, not involving substantial legal questions.

The Tribunal dismissed the Revenue's appeal based on monetary limits outlined in Circular No. 390/MISC/116/2017-JC dated 22.08.2019. The issue did not ... Application for early hearing - monetary amount involved in the appeal - levy of service tax - testing charges received by it in respect of the services rendered in India to its foreign client - whether Revenue’s appeal be decided on merit or monetary limits in the light of Circular No. 390/MISC/116/2017-JC dated 22.08.2019? - scope of the Circular - HELD THAT:- On careful reading of the Circular, it is found that at para 4 of the said Circular it is stated that issues involving substantial questions of law as described in para 1.3 of the instruction dated 17.8.2011 would be contested irrespective of the prescribed monetary limits. Whether the appellant is liable to pay Service Tax on testing charges received by it in respect of the services rendered in India to its foreign client? - HELD THAT:- As per the said issue involved, it does not fall under any of the two categories, which are specified in para 1.3 of Circular dated 17.8.2011. Therefore, merely if any substantial question of law involved, the Revenue is not allowed to file appeal before this Tribunal. Since the amount involved is less than ₹ 50 lakhs, therefore, as per the clear positions from both the above Circulars, no substantial question of law related to constitutional validity of law and/or ultra vires of notification/instruction/circular/order etc. involved in the present case. Therefore, the present case does not fall under the exclusion category as prescribed in para 1.3 of the Circular dated 17.8.2011. As per the issue involved in the present case, the Revenue is not supposed to file appeal before this Tribunal being amount involved is less than ₹ 50 lakhs. Therefore, the appeal filed by the Revenue is dismissed on monetary limits vide Circular dated 22.08.2019. Issues:- Maintainability of the Revenue's appeal based on monetary limits set in Circular No. 390/MISC/116/2017-JC dated 22.08.2019.Analysis:The respondent filed an early hearing application contending that the appeal is not maintainable due to the monetary limits specified in Circular No. 390/MISC/116/2017-JC dated 22.08.2019, which states that the Department should not appeal if the amount involved is less than Rs. 50 lakhs. The Tribunal allowed the early hearing application considering this ground (para 1-2).The main issue before the Tribunal was whether the Revenue's appeal should be decided based on monetary limits or on merit. The respondent argued that since the amount involved was less than Rs. 50 lakhs and did not fall under the exclusion categories in the government's policy, the appeal should be dismissed on this ground alone (para 4).However, the Revenue's representative strongly objected to dismissing the appeal based on monetary limits. They cited a letter from the Dy. Commissioner stating that the issue involved a substantial question of law and should not be disposed of solely on monetary grounds as per the Circular dated 22.08.2019 along with the Instructions F. No. 390/MISC/163/2010-JC DATED 17.8.2011 (para 5).After considering the submissions from both sides and examining the relevant records, the Tribunal focused on the Circular No. 390/MISC/116/2017-JC dated 22.08.2019. They noted that the Circular allows contesting issues involving substantial questions of law, specifically those related to constitutional validity or the legality of notifications, instructions, orders, or circulars, irrespective of monetary limits (para 7).In the present case, the issue revolved around whether the appellant was liable to pay Service Tax on testing charges received for services rendered in India to a foreign client. The Tribunal concluded that this issue did not fall under the categories specified in the Circular dated 17.8.2011 regarding substantial questions of law related to constitutional validity or ultra vires of notifications, instructions, orders, or circulars. Therefore, they held that the Revenue was not permitted to file an appeal before the Tribunal due to the amount involved being less than Rs. 50 lakhs (para 8).Consequently, the Tribunal dismissed the appeal filed by the Revenue based on monetary limits outlined in the Circular dated 22.08.2019, as the issue did not pertain to substantial questions of law falling within the exclusion category specified in the Circular dated 17.8.2011 (para 9).