2023 (5) TMI 440 - HC - Service Tax

Jurisdiction - appropriate forum to entertain the appeal - High Court or Supreme Court - appeals is regarding determination of taxability of the goods for the purpose of assessment of service tax - Sections 35G and 35L of Central Excise Act - Levy of Service tax - Transportation of Goods through Pipelines/Condult Services - seller or service provider - service provider/service recipient relationship exists or not.

HELD THAT:- The very substantial question of law, which has been proposed by the appellant, raises an issue about the liability or otherwise of the assessee to pay service tax on transportation of goods by pipeline service. Thus, the core issue involved pertains to determination of the rate of duty of excise (service tax) or the value of goods for the purpose of assessment. Perusal of the language of subsection (2) of Section 35L of the 1944 Act brings more clarity and virtually puts the controversy beyond the pale of doubt that the issues posed for adjudication are falling in the category of exceptions and, as a consequence, the High Court would not have the jurisdiction to entertain appeal against the order of CESTAT. The provision makes it clear that determination of “any question having a relation to the rate of duty shall include the determination of taxability or excisability of the goods for the purpose of assessment”.

The Full Bench of Bombay High Court considered identical issue in the case of Commissioner Central Excise, Mumbai-V -Vs- Reliance Media Works Limited [2019 (12) TMI 392 - BOMBAY HIGH COURT] has held that Appeals from orders of the Tribunal relating to taxability/excisability passed prior to 6th August, 2014 i.e. the date of insertion of sub-section (2) to section 35-L of the Act being a rate of duty issue, would be appealable only to the Hon'ble Supreme Court and not the High Court.

Similar interpretation, as was made the by Bombay High Court in the above judgment, has been made by various other High Courts in the judgments relied upon by the learned counsel for the appellant. We are in complete agreement with the view taken by the Bombay High Court after apposite evaluation of the statutory provisions - hence, these appeals to the High Court against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata are clearly barred by virtue of Section 35G(1) read with Section 35L of the 1944 Act. Since the issue involved in these appeals is regarding applicability of service tax interest and penalty on transportation of goods through pipelines/conduit services undertaken by the respondent assessee, the same, if were to be challenged, can only be resorted to by filing an appeal before the Hon’ble Supreme Court.

The appeals are dismissed as being not maintainable.