Official litigation policy says in revenue matters, an appeal shall not be filed if the amount involved is not very high or is less than the monetary limit fixed by the revenue authorities. It also states appeals shall not be filed if the matter is covered by a series of judgments of the tribunal in question and the high courts, which have held the field and not been challenged in the Supreme Court (SC).
It also says no appeal shall be filed where the assessee has acted in accordance with the long-standing practice and also merely because of a change of opinion on the part of the jurisdictional officers.
In the case of CCE vs Techno Economic Services Pvt Ltd [2010(255) ELT 526 (Bom)], the Bombay high court observed the Central Board of Direct Taxes had taken a policy decision in March 2000 not to file appeals or references wherein the tax effect is less than the amount prescribed in the instructions issued from time to time. This was to reduce litigation before the HCs and the SC. The decision has definitely reduced the volume of litigation, enabling officers to concentrate on cases involving heavy stakes.
The HC asked the Central Board of Excise and Customs (CBEC) to adopt a similar policy, for these and related reasons, including reducing the burden on the courts and on the revenue department.
Accordingly, on October 20, 2010, the CBEC prescribed monetary limits below which an appeal shall not be filed in tribunals/courts on excise, customs and service tax matters. The Finance Act, 2011, gave necessary powers to CBEC to do so with effect from the earlier date.
The monetary limits were revised on August 17, 2011. Accordingly, the department is not to file appeals before a tribunal where the duty/tax amount is less than Rs 5 lakh. The limits for not filing appeals before HCs and the SC are Rs 10 lakh and Rs 25 lakh, respectively. These limits also apply for matters involving refunds.
However, the monetary limits will not be a consideration on matters before the revisionary authority in the finance ministry or where the constitutional validity of the provisions of an Act or Rule is under challenge or where a notification or instruction or order or circular has been held illegal or unconstitutional. Also, decisions or judgments not challenged in appeal or accepted by the department for reasons of monetary limit do not have precedent value.
The relevant laws make it abundantly clear that no person, being a party in appeal, shall contend that the department had acquiesced in the decision on the disputed issue by not filing an appeal, where an appeal has not been filed by the department following instructions issued for not filing one below the monetary limit.
CBEC recently reiterated this point and advised its counsels/representatives in the tribunal to plead that a judgment accepted for reasons of low amount should not be relied upon by the appellate forum.
So, the trade must take note that on all matters involving amounts less than the monetary limits prescribed, the department is at liberty to agitate the issue in subsequent proceedings till the matter is settled on merits.
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