Disposed¶24

Commissioner of Customs Nh III v. Gulab Fibres

Bombay HC16 Apr 2025CUAPP/14/2025

Case brief

AI extract

What is this about?

Customs appeals by Revenue against CESTAT orders quashing penalties on Goyal Trading, Unitech Inc., Gulab Fibres; disposed under CBIC instructions dated 2 November 2023 fixing Rs. 1 crore monetary limit for High Court appeals; aggregate amount Rs. 7.5 lakhs; penalty-quashing held outside clause 2 classification/refund exception; questions of law left open; no approval or disapproval of Tribunal's view; no costs; Scania Commercial Vehicles India Pvt. Ltd. (2024 SCC OnLine CESTAT 587) and Hemant Bhai R. Patel (2003 (153) ELT 226) referred.

What did the court decide?

All the customs appeals disposed of in terms of the CBIC instructions dated 2 November 2023 (monetary-limit policy), with the questions of law expressly left open; no costs. ¶24

Commissioner of Customs Nh III vs Gulab Fibres — Bombay HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

All the customs appeals disposed of in terms of the CBIC instructions dated 2 November 2023 (monetary-limit policy), with the questions of law expressly left open; no costs.

¶24

Issue for consideration

Whether these appeals, involving amounts below the CBIC monetary limit of Rs. 1 Crore applicable to High Courts, are covered by the Central Board of Indirect Taxes & Customs instructions dated 2 November 2023 restraining the Revenue from filing or pursuing such appeals. +2 more

¶12

Court's answer

These appeals are impacted by the CBIC instructions dated 2 November 2023 and must be disposed of on the grounds of the monetary limits coupled with the appellants' policy of not pursuing such appeals.

¶18

Ratio / Principle

Quashing of a penalty imposed on an individual assessee is not a 'refund issue' within the contemplation of clause 2 of the CBIC instructions dated 2 November 2023; the classification/refund exception for legal and/or recurring-nature adverse judgments does not cover these appeals.

¶17

Key takeaways

The questions of law raised in these appeals are expressly left open.ratio¶19
Disposal of these appeals on grounds of monetary limits may not be construed as the Court's approval or, for that matter, disapproval of the view taken by the Tribunal in these matters.ratio¶22
Since the question of law is kept open, there is no prejudice to the Revenue if it wishes to agitate the issue raised in these appeals in matters where the monetary limit exceeds that prescribed in the CBIC instructions.obiter

Detailed headnote1 paragraphs

Bombay High Court (M.S. Sonak & Jitendra Jain, JJ.; 30 July 2025) disposed of the customs appeals filed by the Commissioner of Customs, Nhava Sheva-III against Tribunal (CESTAT) orders quashing penalties imposed on Goyal Trading, Unitech Inc. and Gulab Fibres (Custom Appeal No. 50 of 2024 also taken on board), applying the Central Board of Indirect Taxes & Customs instructions dated 2 November 2023, under which the Revenue shall not file or pursue appeals before High Courts where the monetary limit is below Rs. 1 Crore; the amounts involved were below or around Rs. 1 lakh per appeal and did not exceed Rs. 7.5 Lakhs collectively. The Court held that quashing of a penalty on an individual assessee, with or without a refund direction, is not a 'refund' or 'classification' issue attracting the clause 2 exception for adverse judgments of a legal and/or recurring nature. The questions of law were expressly left open, and the disposal was not to be construed as approval or disapproval of the Tribunal's view; no prejudice was found to the Revenue agitating the issue where amounts exceed the prescribed limit. Counsel's request to refer to Scania Commercial Vehicles India Pvt. Ltd. v. Commissioner of Customs (2024 SCC OnLine CESTAT 587) and Hemant Bhai R. Patel v. Commissioner of Customs (2003 (153) ELT 226) was noted, the questions of law remaining open. No costs.

¶1

33-34-35-48-49- CUAPP-56-2024F.DOC

¶2

Digitally signed by PALLAVI PALLAVIMAHENDRAWARGAONKAR MAHENDRAWARGAONKARDate:2025.07.31 18:26:52 +0530

¶3

Pallavi

¶4

IN TH O	E HIGH COURT OF JUDICATURE AT BOMBAY RDINARY ORIGINAL CIVIL JURISDICTION CUSTOM APPEAL NO. 56 OF 2024
Commissioner Versus	Of Customs Nhava Sheva-III …Appellant
Goyal Trading	…Respondent WITH CUSTOM APPEAL NO. 58 OF 2024
Commissioner	Of Customs Nhava Sheva-III ...Appellant
Versus
Unitech Inc.	...Respondent
Commissioner	WITH CUSTOM APPEAL NO. 59 OF 2024 Of Customs Nhava Sheva-III ...Appellant
Versus
Unitech Inc.	...Respondent
	WITH CUSTOM APPEAL NO. 13 OF 2025
Commissioner Versus	Of Custom NS III ...Appellant
Goyal Trading	...Respondent WITH CUSTOM APPEAL NO. 14 OF 2025
Commissioner Versus	Of Custom NH III ...Appellant
Gulab Fibres	...Respondent

¶5

Page 1 of 4

¶6

33-34-35-48-49- CUAPP-56-2024F.DOC

¶7

Mr. Karan Adik a/w, Ms Niyati Mankad (VC) and Ms. Priyanka Wagh, for the Appellant. Mr Anil Balani (VC) , for the Respondent.

¶8

CORAM M.S. Sonak & Jitendra Jain, JJ. DATED: 30 JULY 2025

¶9

PC:-

¶10

1. Heard Mr. Adik, learned counsel for the Appellants in all these appeals and Mr. Balani, learned counsel for the Respondents.

¶11

2. Custom Appeal No.50 of 2024 is not on board, but the same is taken on board with the consent of the learned counsel for the parties.

¶12

3. The monetary amount involved in all these appeals is collectively not more than Rs. 7.5 Lakhs. Accordingly, Mr. Balani placed reliance on Central Board of Indirect Taxes & Customs instructions dated 2 November 2023, which provide that the Revenue shall not file or pursue appeals where the monetary limit, insofar as the High Courts are concerned, is less than Rs. 1 Crore. In each of these appeals, admittedly, the monetary limits involved are less than or around Rs. 1 lakh or, in any event, the total monetary amounts in all these appeals, collectively, do not exceed Rs. 7.5 Lakhs.

¶13

4. Mr. Adik, however, refers to clause 2 of these instructions, in which it is stated that adverse judgments relating to classification and refund issues which are of a legal and/or recurring nature would not be covered by the aforesaid instructions.

¶14

Page 2 of 4

¶15

33-34-35-48-49- CUAPP-56-2024F.DOC

¶16

5. However, in all these appeals, the challenge is to the Tribunal’s orders quashing the penalties imposed on the Respondent-assessee. There is no formal direction for refund of the penalty amounts that might have been paid by the Respondent-assessees, though this would be the logical consequence in the absence of any provision to the contrary. These are not the refund issues referred to in the CBIC instructions.

¶17

6. Clause 2 of the instructions dated 2 November 2023 states that adverse judgments related to amounts, aside from classification and refund issues, which are of a legal and/or recurring nature, should be challenged. However, in the current appeals, there are no refund issues as contemplated under the instructions dated 2 November 2023. The instructions refer to typical refund issues or those arising from the resolution of classification issues in any assessment. Such issues could have broad implications, far beyond the individual assessee’s case. But the instruction would not include cases or situations where the penalty imposed on an individual assessee is quashed, with or without specific directions for refunding the quashed penalty amount.

¶18

7. Therefore, these appeals are impacted by instructions dated 2 November 2023 and will have to be disposed of on the grounds of the monetary benefits coupled with a policy of the appellants not to pursue such appeals.

¶19

8. However, the questions of law raised in these appeals are expressly left open. Disposal of these appeals on grounds of monetary limits may not be construed as our approval or, for that

¶20

Page 3 of 4

¶21

33-34-35-48-49- CUAPP-56-2024F.DOC

¶22

matter, disapproval of the view taken by the Tribunal in these matters.

¶23

9. Mr. Adik, in fact requested us to refer to the decision of the CESTAT in Scania Commercial Vehicles India Pvt. Ltd. vs. Commissioner of Customs¹ and the larger Bench of the Tribunal in the case of Hemant Bhai R. Patel vs. Commissioner of Customs² in which he claimed a view contrary to that in the impugned orders was taken.

¶24

10. Since we are expressly keeping the question of law open, we do not think that there will be any prejudice to the Revenue if they wish to agitate the issue now raised in these appeals in matters where the monetary limit exceeds that which is prescribed in the CBIC instructions. However, considering the monetary limits and the Central Board of Indirect Taxes & Customs instructions dated 2 November 2023, we dispose of these appeals by leaving the questions of law open. These appeals are disposed of in the above terms. No costs.

¶25

(Jitendra Jain, J)

¶26

(M.S. Sonak, J)

¶27

1 2024 SCC OnLine CESTAT 587

¶28

2 . 2003 (153) ELT 226

¶29

Page 4 of 4

Commissioner of Customs Nh III v. Gulab Fibres

Case brief

What is this about?

What did the court decide?

Commissioner of Customs Nh III v. Gulab Fibres

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Procedural history

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

Hameeda Mohsen Abdulla Jasim Alhakam vs Union of India

Bharti Axa Life Insurance Company Limited vs Assistant Commissioner of Ncome Tax Circle 4(1)(1) Mumbai and Ors.

Zurich Kotak General Insurance Company India Limited 2022 23 vs Assistant Commissioner of Income tax, Central Circle 6(3), Mumbai

Pr Commissioner of Income Tax 3 Mumbai vs Syntel Private Limited - Ay 2016-17 Ita 1972/MUM/2023

Commissioner of Customs Nh III vs Unitech Inc.

Sachin Rangnath Khatal vs the Income Tax Officer WARD-2, Ahmednagar