2024 (9) TMI 1413 - HC - Central Excise

Tax appeals dismissed as constitutional validity of statutory provisions not challenged under Section 3A Central Excise Act

The Commissioner Of Central Excise, Ahmedabad – I Versus Sinhal Brothers

Gujarat HC dismissed tax appeals filed by the appellant challenging respondent's entitlement to benefits under the Compounded Levy Scheme pursuant to ... Interpretation of the Notification Nos.41 of 1998 and 42 of 1998 - entitlement to the benefits of the Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 - respondent had installed the Hot Air Stenter and was an independent processor falling within the purview of Section 3A of the Central Excise Act, 1944 - HELD THAT:- On perusal of the Notifications, it is clear that the Tax Appeal would be maintainable only if there is a question of constitutional validity of the provision of the Act or the Rules is under challenge or the cases where the Notification / Instruction / Order / Circular is held to be illegal or ultra vires. In the facts of the present case, none of the above conditions are fulfilled and, therefore, in view of the Instructions, the Appeals would not be maintainable in spite of the instructions of the respondent authorities to the learned advocate for the appellant to proceed with the matter on merits. The appeals are dismissed. Issues:Interpretation of Notification Nos. 41 of 1998 and 42 of 1998 for Compounded Levy Scheme eligibility. Applicability of monetary limits for filing appeals in the CESTAT, High Court, and Supreme Court.Analysis:The judgment concerns Tax Appeal No. 885 of 2007, involving the interpretation of Notification Nos. 41 of 1998 and 42 of 1998. The appellant argued that the respondent, an independent processor with a Hot Air Stenter, was not entitled to benefits under the Compounded Levy Scheme as per Section 3A of the Central Excise Act, 1944. Additionally, Tax Appeal No. 884 of 2007 was based on a duty levy of Rs. 1.30 Crore, challenging the orders passed by authorities interpreting the mentioned Notifications. Despite increased monetary limits to Rs. 2 Crore, the appellant proceeded due to specific instructions. The judgment highlighted the Instruction dated 6.8.2024, setting monetary limits for filing appeals in various forums.The Instruction outlined monetary limits for CESTAT, High Court, and Supreme Court appeals, with exceptions for cases challenging constitutional validity or legality of Notifications/Instructions. The judgment emphasized the importance of adverse judgments in such cases. The Instruction clarified that the monetary limits apply to disputed duty amounts, not total demands, and also cover refund cases. It exempted applications before the Joint Secretary from these limits. Furthermore, it addressed concerns regarding audit objections and their impact on appeal limits.In this context, the judgment concluded that the Tax Appeals were not maintainable as they did not challenge constitutional validity or legality of Notifications/Instructions. Despite instructions to proceed, the court dismissed the Appeals in adherence to the specified monetary limits and exceptions outlined in the Instructions. The judgment emphasized the importance of meeting the criteria set by the Instructions for appeal maintainability, ultimately leading to the dismissal of the Appeals.