'Retrospective Effect' - Monetary Limit for Departmental Appeals

Excellent Article covering all relevant Instructions and case law in brief.

The author has expressed apprehension that controversy is likely to arise as the Department may not follow the Instruction dated 01.01.2016 regarding retrospective effect of revised monetary limits in all pending cases by relying upon Supreme Court’s judgments in cases of Suman Dhamija read with Ratan Melting.

This apprehension is not correct. In case of Suman Dhamija, CBDT’s Instructions clearly indicate that they would govern only those appeals filed after 09.02.2011. There were similar wordings in CBEC’s Instruction dated 20.10.2010 at Para 9 stating “The above instructions of the Board must be adhered to strictly for all appeals filed on or after 1.11.2010”. However, in CBEC’s Instruction dated 17.8.2011, the wordings at Para 5 were DIFFERENT stating, “The revised monetary limits shall come into force from 1.9.2011”. This sentence leads to doubt as when appeal was filed before 1.9.2011 but came for hearing after 1.9.2011, whether revised monetary limits will apply or not.

However, in CBEC’s the latest Instruction dated 1.1.2016, it is clearly mentioned that the Instruction dated 17.12.2015 would apply to all pending appeals in High Courts/ CESTAT. So, it is unlikely that the Department will not follow the latest Instructions by relying upon the case of Suman Dhamija.

For the sake of discussion, let us assume that Department has not withdrawn a particular case falling below the revised monetary limit and the CESTAT or HC dismisses Department’s appeal purely on the basis of Instruction dated 1.1.2016 without discussing on merit. When, the appeal is falling below the monetary limit for CESTAT/HC, naturally it will fall below the monetary limit for HC/SC. So, the Department would not be able to file appeal against such order of CESTAT/HC due to monetary limit applicable at the time of reviewing such orders.

These are personal views.

Shvetal Parikh 11/01/2016