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TMI Blog2014 (12) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, pursuant to which certain information was called for vide letter dated 12.08.2008, in response to which certain information came to be furnished by the assessee. However, the revenue authorities were not satisfied with such information and called for further information which was furnished by the assessee through various letters. Still not being satisfied, the revenue authorities summoned Shri Anish A. Shah, Director of the assessee - company for the purpose of recording his statement. The revenue authorities during the course of investigation recorded statements of various persons and noticed that the assessee was having service tax registration for construction services in respect of commercial and industrial buildings and civil structures for different sites. Initially the assessee had obtained service tax registration numbers scheme wise/project wise; however, it had surrendered the three registration certificates and was having only one service tax registration. After detailed investigation, the revenue authorities found as under: S. No. Name of Project Nature of Project Activity undertaken Whether service tax paid or otherwise Name of service under which Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee despite being registered for discharge of service tax liability under commercial and industrial construction with effect from 01.06.2007, has re-classified the services under the works contract services and has discharged less service tax. 4. The assessee contested the show cause notice on various grounds, as also on the ground of limitation. It was the case of the assessee that the development charges received by it cannot be considered as 'real estate agent' services and post 01.06.2007, the assessee is eligible to avail the benefit of works contract which was introduced from that date and can shift from commercial and industrial construction services to works contract services. The adjudicating authority did not agree with the contentions raised by the assessee and confirmed the demand of tax and also imposed penalty under various sections. 5. Being aggrieved, the respondent - assessee carried the matter in appeal before the Tribunal. By the impugned order, the Tribunal allowed the appeal by holding that the amount received by the assessee as development charges was nothing but in the form of profit, which would not get covered under the category of ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reference was made to the provisions of section 35G of the Act, to point out that against an order passed in appeal by the Appellate Tribunal, an appeal shall lie to the High Court if such order is not 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. It was submitted that, therefore, the next question is to decipher whether the question of law proposed by the appellant relates to the rate of duty or value of the services involved. The attention of the court was invited to the questions proposed by the appellant to point out that the same clearly relate to the category of services under which the assessee would fall and the controversy involved in this case, therefore, essentially relates to a classification dispute which has a direct and proximate relation to the rate of duty and the nature of services rendered by the assessee. Under the circumstances, against the impugned order of the Tribunal, appeal would lie before the Supreme Court under section 35L of the Act and not before this court. 7.1 In support of his submissions, the learned counsel placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act so as to vest the High Court with the jurisdiction to adjudicate upon it. 8. On the other hand, Mr. Y. N. Ravani, learned standing counsel appearing on behalf of the appellant, submitted that the main controversy involved in the present case relates to the manner in which the Tribunal has disposed of the appeal and therefore, the same has no proximal relation to the determination of the rate of duty or value of the services and hence, the appeal is maintainable. It was submitted that while it is true that various questions of law have been proposed, including the questions relating to the rate of duty or value of goods; however, if the consideration of the appeal is limited to the infirmities in the impugned order, no question of rate of duty or value of services would be required to be adjudicated by the court and this court is duly empowered to decide the other issues. Referring to the impugned order, it was submitted that the Tribunal has merely referred to the decision of the High Court in the case of Commissioner of Service Tax v. Sujal Developers and has held that the case is squarely covered by the said decision without discussing as to how the said decision is applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary to decide as to whether the impugned order passed by the Tribunal is 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, so as to bar the jurisdiction of the High Court to adjudicate upon the issue. 11. Before adverting to the rival contentions, it would be germane to refer to the decisions on which reliance has been placed by the learned counsel for the assessee. 12. In Commissioner of Central Excise & Customs v. Swiss Glass Coat Equipments Ltd. (supra), this High Court has agreed with the view taken by the Andhra Pradesh High Court in the case of Commissioner of Central Excise, Hyderabad-IV v. Shriram Refrigeration Industries (supra), wherein it has been held that whether the process undertaken by a manufacturer amounts to manufacture or not, and if the goods produced during the process are excisable or not, would fall within the meaning of expression "determination of the rate of duty of excise or the value of the goods for purposes of assessment of duty". 13. In C.C.E., C. & S.T. v. Thiruvananthapuram v. Kerala State Beverages, the Kerala Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on jurisdiction to be that what would fall before the Apex Court are only appeals either as to the rate of duty or as to the value of goods for the purpose of assessment, we may immediately note that rate of tax is a prescription of the Parliament and it is not part of judicial function to tinker with the rate of tax. This has also been noticed in Karnataka State Beverages Corporation Ltd. (supra). Secondly and more importantly, if we were to find jurisdiction with the High Courts to decide as to whether there could be levy of duty of excise in relation to a particular situation, incidence or goods, that would be conceding to the position that what would be left to the Supreme Court is only to determine the rate of tax and the value of goods for the purpose of assessment which matters would get confined to issues which are fundamentally inferior in jurisprudential content vis-àvis questions relating to the coverage itself. We do not see that the Act envisages that the High Courts would have the power of such nature that they decide the question of coverage; leaving to the Supreme Court only issues relating to the rates, sans the issue of coverage. We say this in furthera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit in judgment and alter or modify the said rate of tax. The Court has no jurisdiction to go into the correctness or otherwise of the rate of tax payable in the sense that the rate prescribed by the legislature. In the case of Finance Act, 1994, the rate of service tax payable is uniform to all the services. If the rate of tax is to be understood in the sense it is suggested, section 35G and 35L, has no application at all to the Finance Act. Such an interpretation would render Section 83 in so far as applying the provisions of Section 35G and 35L redundant. Then there is no provision in the Finance Act, 1994 for determination of the aforesaid disputes. That was not the intendment of the Parliament. Therefore, the argument that rate of tax means only the rate at which tax is payable or a fraction is unsustainable. 36. Broadly, the following disputes do not fall within the jurisdiction of the High Court under section 35G of the Act:- (a) Dispute relating to the service tax payable on any service/taxable service. (b) The value of the taxable service for the purposes of assessment. (c) A dispute as to the classification of services. (d) Whether those services are covered by an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the stage of determining the rate of service tax and value of service." 16. The above decision of the Karnataka High Court has been followed by it in a subsequent decision in the case of Commissioner of Central Excise, Customs & Service Tax v. Bellary Computers, 2014 (33) STR 504 (Kar.), and by the Allahabad High Court in the case of Royal Bank of Scotland N.V. v. Commissioner of Customs & Central Excise, Noida, 2014 (35) STR 68 (All.). 17. Reference may now be made to the relevant statutory provisions. The Finance Act, 1994 does not provide for any mechanism for appeal against an order made by the Appellate Tribunal under section 86 thereof. However, section 83 thereof provides for the application of certain provisions of the Central Excise Act, 1944 and reads thus: "83. Application of certain provisions of Act 1 of 1944 : The provisions of the following sections of the Central Excise and Salt Act, 1944 as in force from time to time, shall apply, so far as may be in relation to service tax as they apply in relation to duty of excise." 18. It is in the light of the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to service tax under the Finance Act, 1994, what would be required to be examined is as to whether the order passed by the Tribunal relates to the determination of the rate of service tax or the value of any service for the purpose of assessment. 20. Therefore, the moot question that arises for consideration is as to whether the order passed by the Tribunal is an order relating to determination of the rate of service tax or the value of any service for the purpose of assessment. As can be seen on a combined reading of section 35G and section 35L of the Act, if the order of the Tribunal relates to determination of the rate of duty, the appeal would lie before the Supreme Court and not before the High Court. The expression "rate of duty" has not been defined under the Act. However, for the purpose of considering the meaning assigned to the said expression, the Supreme Court in the case of Navin Chemicals Mfg. & Trading Co. Ltd. v. Collector of Customs, 1993 (68) ELT 3 (SC), has looked into the Explanation under section 35E of the Central Excise Act which deals with the powers of the Board or Commissioner of Central Excise to pass certain orders. Section 35E of the Act, insofar a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f February, 1986; or (b) relating to the value of goods for the purposes of assessment of any duty of excise in cases where the assessment is made on or after the 28th day of February, 1986; or (c) whether any goods are excisable goods or whether the rate of duty of excise on any goods is nil; or (d) whether any goods fall under a particular heading or sub-heading of the First Schedule and the Second Schedule of the Central Excise Tariff Act, 1985 (5 of 1986), or the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), or the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), or that any goods are or not covered by a particular notification or order issued by the Central Government or the Board, as the case may be, granting total or partial exemption from duty; or (e) whether the value of any goods for the purposes of assessment of duty of excise shall be enhanced or reduced by the addition or reduction of the amounts in respect of such matters as are specifically provided in this Act." 21. On a plain reading of the above provision, the intention of the legislature as regards the expression "determination of the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot get covered under the category of real estate agent services. Evidently, therefore, the dispute involved in the present case relates to whether the activity carried out by the assessee is a service within the meaning of such expression as defined under the Finance Act, 1994; or whether such service falls under the category of taxable service under sub-section (105) of section 65 of the Finance Act, 1994. Therefore, the controversy involved in the present case is a classification dispute which has a direct and proximate relation to the rate of service tax or the value of any service. Consequently, this court has no jurisdiction to adjudicate upon the said controversy. 23. However, on behalf of the appellant, the learned counsel has submitted that the impugned order passed by the Tribunal is a non-reasoned and non-speaking order and as such, if the court considers the appeal to the limited extent of the above infirmities in the impugned order, no question of rate of duty or value of service would be required to be adjudicated and this court would be duly empowered to decide the same. 24. In this regard, a perusal of the questions proposed by the appellant reveals that no questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. Under the circumstances, the submission that the impugned order suffers from the infirmity of being a nonspeaking and non-reasoned one, is not borne out from the record of the case. 26. In the light of the above discussion, the contention advanced by the learned counsel for the appellant that the appeal be limited to the question as to whether the impugned order passed by the Tribunal is non-reasoned and nonspeaking one, does not merit acceptance. 27. The only question that then remains is on the merits of the case, which as noticed hereinabove, is as to whether the service rendered by the assessee is a service within the meaning of the said expression as envisaged under the Finance Act, 1994 and as to whether such service falls under the category of taxable service under sub-section (105) of section 65 of the Finance Act, 1994, and if so, under which category of services, the same would fall. The issue involved in the present case has, therefore, a direct and proximate relation to the rate of service tax and the value of services and as such, this court lacks the jurisdiction to entertain this appeal and the appeal would lie before the Supreme Court under section 35L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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