The Commissioner of CGST & Central Excise, Thane v. Ajit India Private Limited

1. This appeal has been filed under section 35G of the Central Excise Act, 1944 (the “Excise Act”) read with Finance Act, 1994 against the order dated 25th May, 2018 passed the Customs Excise and Service Tax Appellate Tribunal, Mumbai (CESTAT), whereby the appeal preferred by the appellant was allowed.

2. The respondent is a manufacturer as well as service provider for the services of business auxiliary service, erection commissioning and installation service, renting of immovable property service and transport of goods by road service. Priya Soparkar 2 24 cexa 14-20-os

3. Pursuant to the order in original the respondent was held liable for service tax amounting to Rs. 2,74,35,654/- by invoking extended period of time in the category of erection commissioning and installation services instead of construction of complex service. Aggrieved by the same, the respondent filed an appeal before the CESTAT which was allowed. Aggrieved by the said order, the Commissioner of CGST and Central Excise Thane has preferred this appeal proposing the following questions as substantial questions of law:-

(i) Whether the CESTAT was justified in taking contrary view to it’s earlier order dated 09th October, 2012 passed in the same matter, remanding back the matter for a limited purpose and without keeping the other issue open?

(ii) Whether the CESTAT was right in holding that the demand under the Show Cause Notice is not raised under the correct head and therefore, it cannot be sustained?

(iii) Whether the CESTAT was right in holding that the activity carried out by the assessee is classifiable under Works Contract Service?

(iv) Whether the CESTAT was right in holding that extended period of limitation cannot be invoked in the facts and circumstances of the case?”

4. Mr.Dharmadhikari, learned counsel for the respondent raises an issue of maintainability of this appeal submitting that the question of law at paragraph No.5(c) refers to classification which would involve determination of rate of tax and therefore is not appellable before this court but under section 35L of the Excise Act which appeal would need to be filed before the Apex Court.

5. A bare perusal of the question No.5(c) as above clearly indicates that in order to determine the said question the aspect of classification of the services rendered by the respondent would have to be gone into.

6. Sections 35G and 35L of the Excise Act are quoted as under:- 3 24 cexa 14-20-os “35G Appeal to High Court-(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law. 35L. (1) Appeal to Supreme Court.—An appeal shall lie to the Supreme Court from --(a) any judgment of the High Court delivered—

(i) in an appeal made under section 35G; or

(ii) on a reference made under section 35G by the Appellate

(iii) on a reference made under section 35H, in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved, immediately after passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court; or (b) any order passed before the establishment of the National Tax Tribunal by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment. (2) For the purpose of this Chapter, the determination of any question having a relation to the rate of duty shall include the determination of taxability or excisability of goods for the purpose of assessment.” (Emphasis supplied)

7. The Apex Court in the case of Navin Chemicals Manufacturing and Trading Company Limited Vs. Collector of Customs[1] has decided that classification issue is an issue of rate of duty and /or value of goods for the purposes of assessment. Paragraph 11 of the said decision is usefully quoted as under:-