Departmental appeal rejected for low monetary value; cross-objection time-barred under Section 129A(4) of Customs Act

The CESTAT Hyderabad dismissed the departmental appeal as non-maintainable on the ground that the disputed amount was below the monetary threshold prescribed in the relevant circular, rendering the appeal liable to rejection on policy grounds. The Tribunal relied on binding precedent of the SC affirming dismissal of appeals on low monetary value. It further held that the respondent's cross-objection, filed 84 days after service of notice from the registry, was barred by limitation under Section 129A(4) of the Customs Act, 1962 and therefore not entertainable. The distinction between service of the appeal copy and formal registry notice was emphasized for computing limitation.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the departmental appeal before the Tribunal was maintainable in view of the monetary limits prescribed by CBIC Circular No. 390/Misc./30/2023-JC dated 02.11.2023, considering that the case involved confiscation, redemption fine and penalty but no duty demand.

1.2 Whether the cross-objection filed by the respondent was within the limitation period prescribed under Section 129A(4) of the Customs Act, 1962, and hence maintainable.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Maintainability of departmental appeal in view of CBIC monetary limit circular

Legal framework

2.1 The Tribunal referred to CBIC Circular / Instruction F. No. 390/Misc./30/2023-JC dated 02.11.2023 issued under Section 131BA of the Customs Act, 1962, fixing monetary limits for filing appeals by the Department: Rs. 50 lakh for CESTAT, Rs. 1 crore for High Courts and Rs. 2 crore for the Supreme Court.

2.2 The Circular provides that adverse judgments must be contested irrespective of the amount involved only where: (a) constitutional validity of an Act/Rule is under challenge; (b) a Notification/Instruction/Order/Circular has been held illegal or ultra vires; or (c) classification and refund issues of legal and/or recurring nature are involved.

Interpretation and reasoning

2.3 The Tribunal noted that, as per the order of the Commissioner (Appeals), no duty was payable at the time of redemption of goods on payment of fine, and the "duty element in dispute is Nil".

2.4 The Commissioner (Appeals) had granted redemption of goods on payment of redemption fine of Rs. 4,70,000/- and imposed penalty of Rs. 50,000/-. Even by clubbing redemption fine and penalty, the total amount in dispute came to Rs. 5,20,000/-, which was far below the monetary limit of Rs. 50 lakh fixed for appeals before CESTAT, and was stated to be "not even 10% of the monetary limit".

2.5 The Departmental Representative argued that the Circular did not cover cases of smuggling involving confiscation, imposition of fine and penalty, and therefore the appeal was maintainable notwithstanding the monetary limit.

2.6 The Tribunal examined the text of the Circular and found no specific exclusion for cases of smuggling or for orders of confiscation / fine / penalty; nor did the case fall within any of the three specified exception categories (constitutional validity, ultra vires challenge to notifications/instructions/orders/circulars, or classification/refund issues of legal/recurring nature).

2.7 The Tribunal considered a decision of a High Court where the value involved was above the monetary limit and the order related to absolute confiscation, and held that decision to be distinguishable as, in the present case, (i) there was no duty involved, (ii) the total amount of fine and penalty was much below the monetary limit, and (iii) the order was not one of absolute confiscation.

2.8 The Tribunal also relied on a decision of the Supreme Court where appeals were dismissed on the ground that the "tax effect" fell below the threshold prescribed in the same CBIC instruction dated 02.11.2023, treating such monetary limits as binding for the purpose of filing departmental appeals.

Conclusions

2.9 The Tribunal concluded that, since the total amount involved (redemption fine and penalty) was significantly below the monetary limit of Rs. 50 lakh for CESTAT and the case did not fall within any of the exception categories specified in the Circular, the departmental appeal was hit by the monetary limit policy.

2.10 The appeal filed by the Department was held not maintainable on monetary grounds and was dismissed on that basis.

Issue 2: Limitation and maintainability of cross-objection under Section 129A(4)

Legal framework

2.11 Section 129A(4) of the Customs Act, 1962 permits the party against whom an appeal has been preferred to file a memorandum of cross-objection "within 45 days of the receipt of the notice" of appeal.

Interpretation and reasoning

2.12 The Departmental Representative contended that the cross-objection was time-barred, stating that a copy of the appeal was emailed to the respondent on 23.06.2015, i.e., on the date of filing the appeal.

2.13 The respondent argued that for the purposes of Section 129A(4), limitation runs from the date of receipt of "notice of appeal", not from any earlier communication or copy of appeal sent by the appellant, and that the respondent is entitled to 45 days from actual receipt of such notice.

2.14 The Tribunal distinguished between: (i) a copy of the appeal sent by the appellant on filing of the appeal, and (ii) the notice of appeal issued by the Tribunal's Registry, holding them to be two different events for purposes of Section 129A(4).

2.15 The record showed that the Registry issued notice to the respondent on 07.08.2025, and the notice was delivered on 19.08.2025 as per consignment/tracking records. The respondent filed the cross-objection on 13.11.2025.

2.16 Calculated from 19.08.2025, the cross-objection was filed after 84 days, which exceeded the statutory limit of 45 days prescribed in Section 129A(4).

Conclusions

2.17 The Tribunal held that the relevant starting point for limitation under Section 129A(4) is the date of receipt of the notice of appeal issued by the Registry, not the date on which a copy of the appeal may have been sent by the appellant.

2.18 As the cross-objection was filed 84 days after receipt of the Registry's notice, it was beyond the prescribed period of 45 days and was not permissible in law.

2.19 The cross-objection filed by the respondent was held to be time-barred and not maintainable.

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