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Shri Jiban Kumar Saha Versus The Joint Commissioner of Central Excise & Service Tax, Shillong And Shri Dilip Kumar Kar Versus The Additional Commissioner of Central Excise & Service Tax, Shillong

2016 (9) TMI 328 - MEGHALAYA HIGH COURT

Liability of service tax writ jurisdiction - alternative remedy of appeal - Section 35 of the Excise Act, 1944 - road construction/renovation works - Commercial and Industrial Construction Service section 65(105)(zzq) of the Finance Act, 1994 - Works Contract Service section 65(105)(zzzza) of the Finance Act, 1994 - Notification No.24/2009-Service Tax dated 27.07.2009 Held that: - the contentions of the petitioners that the authorities concerned have taken a wrong decision or have reache .....

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tive appeals within thirty days with the requisite pre-deposit, the Appellate Authority may examine the matter on merits while ignoring the question of limitation. - Pre-deposit section 35 F of the Central Excise Act, 1944 - the submissions of the petitioners are unacceptable that making of pre-deposit is of such a hardship that may result in depriving them access to the appellate forum requirement of payment of pre-deposit upheld. - WP (C) No. 157 of 2015, WP (C) No. 234 of 2015 - D .....

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authorities under the Central Excise Act, 1944 [ the Act of 1944 ] pursuant to the respective show cause notices, holding them liable for service tax in relation to the road construction/renovation works said to have been undertaken by them. The case of the petitioners is that the construction/renovation works carried out by them were that of exempted service under the provisions of the Commercial and Industrial Construction Service as also under the Works Contract Service [respectively under S .....

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ned counsel for the parties and having perused the material placed on record with reference to the law applicable, we are satisfied that for availability of efficacious alternative remedy of appeal, there is no reason or justification that these matters be entertained in the writ jurisdiction. During the course of submissions, it has not been in dispute that as against the orders in question, the alternative remedy of appeal is indeed available under Section 35 of the Act of 1944. The petitioner .....

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ion 35F of the Central Excise Act, 1944, right to file appeal has been made conditional, subject to mandatory pre-deposit of 7.5% for first time appeal and 10% for second appeal of the duty and penalty confirmed in the order, which has caused severe hardship to the Petitioner. It is respectfully submitted that the Respondent Authority has mechanically confirmed the demand by issuing vague, cryptic and arbitrary order, without addressing the defence submissions and without due consideration of la .....

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5.2 Impugned Order is violative to the Section 65(105)(zzq), Section 65 (105)(zzzza)] of the Finance Act, 1994 and the Service Tax Notification No 24/09-Service Tax, dated 27th July, 2009 and other Circulars and Instructions issued by the Central Board of Excise and Customs (CBEC). Thus, impugned order passed by the Respondent Authority is without jurisdiction. 15.3 Further, it is felt that approaching the Commissioner of Appeals, Central Excise & Service tax would be an exercise in futility .....

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o efficacious adequate alternative remedy is available under the circumstances. 15.4 Ld Commissioner of Appeals, Central Excise & Service Tax, Guwahati, rejected the claim of exemption on the following grounds recorded in the order in appeal as below: I have gone through the details of the work orders and find that the contract for the Road construction was composite Contract in nature including the service portion as well as cost of materials. M/S ONGC is a public limited company and its sh .....

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vene and set right the things exercising the power conferred under Article 226 of the Constitution of India. Therefore, it is prayed that this Hon ble Court shall intervene and set right the things by exercising the power conferred under Article 226 of the Constitution of India. It has been contended on behalf of the respondents that the petitioners have not been able to make out a clear case for bypassing the alternative remedy of statutory appeal and invoking the writ jurisdiction of this Cour .....

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f Central Excise, Chandan Nagar vs. Dunlop India Ltd.: (1985) 1 SCC 260; Ujjam Bai vs. State of Uttar Pradesh: AIR 1962 SC 1621; Union of India vs. Guwahati Carbon Ltd.,: (2012) 11 SCC 651; and Commissioner of Income Tax and others vs. Chhabil Dass Agarwal: (2014) 1 SCC 603. Learned counsel for the petitioners has countered the objection of the respondents while strenuously contending that the orders impugned are assailable in the writ jurisdiction of this Court for the authorities concerned hav .....

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er Section 35 of the Act of 1944 cannot be said to be an efficacious remedy for several reasons including the fundamental one that with the amended Section 35-F of the Act of 1944, it is mandatorily required of an appellant to make pre-deposit @ 7.5% for the first time appeal and @ 10% for the second time appeal, of the duty and penalty confirmed in the order; and looking the substantial amount of duty imposed [a sum of ₹ 22,20,380/- in WP(C) No.157 of 2015; and a sum of ₹ 31,99,284/ .....

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ases too and, therefore, the remedy of appeal cannot be considered to be an efficacious one. The learned counsel for the petitioners has referred to and relied upon several decisions including those of the Hon ble Supreme Court in Godrej Sara Lee Ltd. vs. Assistant Commissioner (AA): 2009 (236) E.L.T. 425 (S.C.); Union of India vs. Mangal Textile Mills (I) Pvt. Ltd.: 2011 (269) E.L.T. 3 (S.C.); A.V. Venkateshwaran, Collector of Customs, Bombay vs. Ramchand Sobhraj Wadhwani and another: 1983 (13) .....

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matters in totality, we are clearly of the view that no case for bypassing the regular remedy of statutory appeal is made out and these writ petitions deserve to be dismissed on this ground alone. There is no quarrel with the propositions, which remain more than settled, that the power of the High Court under Article 226 of the Constitution of India is plenary in nature and is not curtailed by other provisions; and that the availability of alternative remedy is not that of an absolute bar agains .....

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s true that power of the High Court to issue prerogative writs under Article 226 of the Constitution is plenary in nature and cannot be curtailed by other provision of the Constitution or a Statue by the High Courts have imposed upon themselves certain restrictions on the exercise of such power. One of such restrictions is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction under Article 226 of the Constitution. But again, this ru .....

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ite: The passages in the judgment of this Court we have extracted would indicate (1) that the two exceptions which the learned Solicitor General formulated to the normal rule as to the effect of the existence of an adequate alternative remedy were by no means exhaustive, and (2) that even beyond them a discretion vested in the High Court to have entertained the petition and granted the petitioner relief notwithstanding the existence of an alternative remedy. We need only add that the broad lines .....

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comes up before the Court. In Harbanslal Sahnia s case (supra), the Hon ble Supreme Court has delineated three basic contingencies where the High Court would exercise its writ jurisdiction in spite of availability of an alternative remedy in the following:- 7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed, suffice it to observe t .....

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hout jurisdiction or the vires of an Act and is challenged [See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors., (1998) 8 SCC 11…. In the other referred cases of Godrej Sara Lee Ltd., Kuntesh Gupta and Sanawarmal Purohit, the Hon ble Supreme Court has again ruled on the same principles of law that alternative remedy is not a bar on the maintainability of the writ petition if the authorities concerned have acted wholly without jurisdiction or where an order is questioned .....

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d to contend before us that the orders impugned are wholly without jurisdiction inasmuch as the authorities concerned have totally failed to examine the provisions of law applicable and to correctly apply the notifications governing the field and hence, the present cases are covered under contingency No. (iii) envisaged in Harbanslal Sahnia (supra). We are afraid, the submissions of the learned counsel for the petitioners, suggestive of an error of law on the part of the authorities concerned, d .....

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e concept of want of jurisdiction, as expounded in Ujjam Bai s case (supra), being relevant for the purpose of the question at hand, could be noticed as follows:- 15…… It is necessary first to clarify the concept of jurisdiction. Jurisdiction means authority to decide. Whenever a judicial or quasi-judicial tribunal is empowered or required to enquire into a question of law or fact for the purpose of giving a decision on it, its findings thereon cannot be impeached collaterally or o .....

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determination of any question that it is empowered or required (i.e., has jurisdiction) to determine…….. When examined on the touchstone of the principles aforesaid, it is evident that the contentions on the part of the petitioners are not making out a case of want of jurisdiction with the respondent-authorities. At the most, the contentions are suggestive of error of law, or to say, want of correct application of law to the facts of the case. To put it differently, the contentions .....

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ction, being wholly baseless, is required to be rejected. Coming to the question of pre-deposit, it is an admitted position that with the amended Section 35-F of the Act of 1944, the mandatory pre-deposit is required at 7.5 percent for the first time appeal and 10 percent for the second appeal over the component of demand as specified therein. The petitioners have merely stated that such provisions cause severe hardship to them. It is not the case of the petitioners that they are not at all poss .....

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₹ 5.63 crores [in WP(C) No.157 of 2015] and about ₹ 8.08 crores [in WP(C) No.234 of 2015]. In an overall comprehension of the factual scenario, we are unable to accept the submissions of the petitioners that making of pre-deposit is of such a hardship that may result in depriving them access to the appellate forum. The other suggestion about the Appellate Authority having taken a particular view of the matter has only been noted to be rejected. A particular view by the Appellate Auth .....

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for the reason that in the Scheme of the Act of 1944, specific machinery for dealing with grievances has been provided, with multiple appeals. There appears no reason that the petitioners would avoid taking recourse to such remedies. Of course, recourse to such remedies is required to be taken in accordance with law. For what has been discussed hereinabove, when we find that an efficacious remedy of statutory appeal is available in the matter and there is no reason to allow the petitioners to by .....

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