This appeal by the Department arises from common order dated 25.08.2010 of the Central Excise and Service Tax Appellate Tribunal, West Zone Bench, Ahmedabad passed Appeal No. E/1485 of 2006 to E/1487 of 2006 and corresponds to appeal no. E 1486 of 2006. 1.1. The appellant-Department proposed the following questions proposing them as substantial question of law:-
“(I) Whether, in the facts and circumstances of the case, the Tribunal has justified in accepting the plea of the respondent that grey fabrics was 'input' for them, even when the respondent has never used grey fabric as 'input' and never manufactured finished/processed fabrics themselves or through any job worker?
(ii) Whether, in the facts and circumstances of the case, the Tribunal has justified by treating the respondent as manufacturer of processed man made fabrics even when they have not not fulfilled the condition of 'actual manufacturer' or deemed manufacturer' as they have never undertook any manufacturing or processing activity on very fabric themselves or through others and never sold/cleared finished/processed fabrics on payment of duty?
(iii) Whether, in the facts and circumstances of the case, the Tribunal has justified in allowing Cenvat Credit on the grey fabrics as 'input' of the respondent ?
(iv) Whether the impugned order of the Tribunal can be said to be an order passed in accordance with law?”
1.2 This Court issued notice in the appeal on 12.01.2012.
2. We heard learned senior counsel Mr. R. J. Oza assisted by learned advocate Ms. Raujuta Oza for the appellant and learned advocate Shri Nirav P. Shah for the respondents.
3. The respondent assessee was engaged in business of manufacturing of the grey fabrics. Pursuant to show cause notice dated 8.7.2004 on the ground that the assessee had availed wrongfully Cenvat Credit, the Assessing Officer passed order directing recovery of excess Cenvat Credit of Rs. 2,55,857/- under Rule 12 of Cenvat Credit Rules, 2002 read with Section 11A of the Central Excise Act, 1944 and also imposed penalty of Rs. 60,000/- and interest vide order dated 19.10.2005.
4. At the beginning of hearing, learned advocate for the respondent invited attention of the Court to two circulars dated 20.10.2010 & 17.08.2011 issued by the Central Excise Department. These circulars, provided monetory limit for the purpose of filing appeal before the High Court. The Circular dated 20.10.2010 fixes the limit of Rs. 2 lakhs, whereas the said limit came to be enhanced to 10 lakhs vie subsequent circular dated 17.08.2011. It is provided therein that the cases where the duty/tax under dispute is below that limit, the department will not file an appeal before the High Court.
4.1 On the basis of the same, it was submitted by learned advocate for the respondent that since in the present case, the amount of duty involved is Rs. 2,55,857/- with equivalent penalty, the Department was not justified in preferring the appeal in view of the monitory limit fixed by in circular dated 17.08.2011, the appeal deserves to be dismissed.
4.2 Learned advocate for the appellant was not in position to dispute the contents of the circular. However, he submitted that the appeal was filed on 1.4.2011 and at the time of presentation of appeal, the circular dated 17.08.2011 fixing 10 lakhs monetory limit was not in existence and therefore, the said limit does not apply in the facts of the present case.
4.3 While it may be that when the appeal was preferred, the circular dated 17.08.2011 was not issued. However, it appears from record that the appeal was posted before the Court first time on 11.12.2011 and the notice was issued on 12.11.2012. At the time of issuance of notice in the appeal, the circular dated 17.08.2011 was very much in force and the monetary limit of 10 lakhs provided therein was applicable. Had the said aspect been pointed out to the Court, the Court would not have issued the notice. In any way, when this appeal has come up for consideration, the circular is in vogue and the monetary limit applies. We, therefore, do not find it necessary to go into the merits of the appeal, as the disputed amount in the present appeal is below 10 lakhs.
4.4 The department is bound by its own Circular and the instruction thereof. We are informed that no other circular withdrawing or reducing the monetary limit has been issued by the Department and circular dated 17.08.2011 holds the field as far as the prescription of monetory limit for filing appeal before high court is concerned. It is pertinent to mention that we have taken the similar view in various tax appeals.
5. Accordingly, appeal is dismissed considering the monetory limit prescribed in the abovementioned circular dated 17.08.2011. While dismissing the appeal on the said ground alone, it is made clear that this Court has not gone into nor expressed anything on merits. The questions raised by the department in the appeal are kept open to be decided in appropriate case.
[V.M.SAHAI, J.]
[N.V.ANJARIA, J.]
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