2025 (9) TMI 1290 - HC - Customs

Appeal dismissed as below Rs.1 crore threshold under CBIC circular dated 2 November 2023; refund interest dispute excluded

The HC refused to entertain and disposed of the appeal as below the monetary threshold of Rs.1 crore prescribed by the CBIC circular dated 2 November ... Maintainability of appeal - monetary limit for filing the appeal - HELD THAT:- It is not in dispute that the Central Board of Indirect Taxes and Customs has issued a circular/instructions dated 2nd November 2023 directing that no Appeals should be filed below the monetary limits as more particularly set out in the said Circular. There are of course exceptions to this rule as set out in the Circular itself. The Circular itself contemplates that adverse judgments relating to certain category of cases should be contested irrespective of the amount involved. On perusing the circular/instructions dated 2nd November 2023, it is apparent that no Appeal can be filed if the subject matter of the Appeal is below Rs. 1 Crore (as far as the High Court is concerned). Admittedly in the facts of the present case, the subject matter of the present Appeal is below the monetary limit of Rs. 1 Crore. It is also not found that the subject matter of this Appeal would fall within any of the exceptions as set out in Clause 2 of the above Circular. The issue in the above Appeal is whether on the amount refunded to the Petitioner [after imposing a redemption fine and penalty], the Revenue would be liable to pay interest thereon or otherwise. This would certainly not be one of the cases which would fall within the exceptions. This being the case, the present Appeal being below the monetary limit of Rs. 1 Crore [as prescribed in the Circular dated 2nd November 2023] does not warrant entertainment by this Court. The Appeal not entertained and the same stands disposed of as the same is below the monetary limits prescribed in the Circular dated 2nd November 2023. ISSUES PRESENTED AND CONSIDERED 1. Whether an appeal before the High Court is barred by intra-departmental instructions (CBIC circular dated 2-11-2023) fixing monetary limits for filing appeals, where the subject matter value is below the prescribed limit of Rs. 1 Crore. 2. Whether the High Court may entertain an appeal below the monetary threshold where the appellant contends the tribunal lacked jurisdiction (i.e., a jurisdictional question purportedly raising a question of law). 3. Whether the subject-matter of the present appeal falls within the exceptions to the Circular (constitutional validity; illegality/ultra vires of Notification/Instruction/Order/Circular; classification and refund issues of legal/recurring nature). 4. Whether a prior order admitting an appeal below the monetary limit is binding or persuasive in the present proceedings and, if relied upon, whether it is distinguishable. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Applicability of CBIC Instruction (monetary limits) to bar filing/entertainment of appeal before the High Court Legal framework: The Circular/Instruction issued by the Central Board of Indirect Taxes & Customs dated 2-11-2023, issued under Section 131BA of the Customs Act, 1962, prescribes monetary thresholds below which departmental appeals shall not be filed in CESTAT, High Courts and the Supreme Court (High Courts: Rs. 1 Crore). Precedent Treatment: The Court treated the Circular as a binding departmental instruction that limits filing/entertainment of departmental appeals below prescribed monetary thresholds, subject to exceptions expressly enumerated therein. Interpretation and reasoning: The Court examined the Circular's terms and found its plain operation bars departmental appeals before the High Court where the subject matter is below Rs. 1 Crore, unless an exception applies. The Court applied the Circular to the facts: the subject-matter value here is admitted to be below Rs. 1 Crore and none of the enumerated exceptions apply. Ratio vs. Obiter: Ratio - The Court's conclusion that the Circular precludes entertainment of the present departmental appeal where the subject value is below Rs. 1 Crore is dispositive of the matter. Obiter - observations on the scope of Section 131BA as empowering the Board to issue such instructions are ancillary. Conclusions: The appeal is barred from entertainment by the High Court under the CBIC Circular dated 2-11-2023 because the subject matter is below Rs. 1 Crore and does not fall within any specified exception. Issue 2 - Effect of claimed jurisdictional defect of tribunal on applicability of the Circular Legal framework: Distinction between departmental litigious policy (monetary thresholds) and constitutional/jurisdictional constraints on adjudicatory bodies; department's instruction limits filing/entertainment subject to exceptions for matters of constitutional or recurring legal importance. Precedent Treatment: The Court acknowledged the Revenue's contention that a genuine jurisdictional question (i.e., CESTAT's inherent lack of jurisdiction under Section 129A proviso exclusion) could warrant departure from the Circular. The Court referenced a prior order where such a jurisdictional issue was entertained despite monetary limits. Interpretation and reasoning: The Court analysed whether a jurisdictional question arises on the facts. It held that the Revenue's projected question of law might, in principle, be jurisdictional; however, on the facts of the present appeal, no such jurisdictional defect was made out that would bring the matter within the exceptions to the Circular. Thus, the Circular remains applicable. Ratio vs. Obiter: Ratio - The Court's application of the Circular stands even where the Revenue alleges a jurisdictional defect unless such defect is clearly established and squarely falls within the Circular's exceptions. Obiter - General observations that jurisdictional issues may, in an appropriate case, justify entertaining appeals below the monetary limits. Conclusions: The asserted jurisdictional challenge did not, on the present facts, displace the applicability of the Circular; therefore the appeal is not to be entertained on that basis. Issue 3 - Whether the subject-matter falls within the Circular's enumerated exceptions Legal framework: Clause 2 of the Circular lists exceptions to the monetary-limits bar: (a) constitutional validity challenges; (b) where a Notification/Instruction/Order/Circular has been held illegal or ultra vires; (c) classification and refund issues of a legal and/or recurring nature. Precedent Treatment: The Court applied the exception criteria strictly and required that the subject-matter demonstrably fit one of the specified categories to permit filing/entertainment. Interpretation and reasoning: The Court characterised the present issue as whether interest is payable on amounts refunded after imposing redemption fine and penalty. It found this dispute does not implicate constitutional validity, the illegality/ultra vires of a notified instrument, nor is it a classification/refund issue of a legal or recurring nature as contemplated by the Circular. Ratio vs. Obiter: Ratio - The Court's finding that the present controversy does not satisfy any exception is central to disposal. Obiter - The Court's description of the kinds of matters contemplated by the exceptions provides guidance for future cases. Conclusions: The appeal does not fall within any exception to the Circular; hence it cannot be entertained by the High Court under the departmental instruction. Issue 4 - Reliance on prior admitted appeal below the monetary limit and its distinguishing Legal framework: Decisions admitting appeals below prescribed departmental monetary limits may be considered, but are subject to factual and procedural distinctions, including whether the Circular was placed before the Court and whether a jurisdictional issue arose. Precedent Treatment: The Court considered a prior order admitting an appeal below Rs. 1 Crore but treated it as distinguishable rather than binding. The Court emphasised that the earlier order may have involved a clear jurisdictional question and it was unclear whether the Circular had been placed before that Court. Interpretation and reasoning: The Court observed two distinguishing features: (i) uncertainty whether the Circular was drawn to the earlier Court's attention when it admitted the appeal; (ii) the earlier matter involved a clear jurisdictional issue that may have justified admission despite the monetary limit. On these bases the Court found the prior order immaterial to compel admission here. Ratio vs. Obiter: Ratio - A prior order admitting an appeal below the monetary limit is not controlling where distinguishable on facts (notably presence/absence of a jurisdictional question and notice of the Circular). Obiter - The Court's comments on the permissive weight of such prior orders. Conclusions: Reliance on the earlier admitted appeal is misplaced; that order is distinguishable and does not warrant admission of the present appeal. Disposition and consequential directions (legal effect of conclusions) Conclusions: The Court declined to entertain the appeal and disposed of it on the ground that it is below the monetary threshold prescribed by the CBIC Circular dated 2-11-2023. The Court expressly kept open the substantive question of law projected by the Revenue for determination in an appropriate case where the Circular's limits or exceptions are not determinative. Interim relief applications consequential to the appeal stood disposed as infructuous. Procedural directions were given for digital authentication of the order.