2011 (4) TMI 1099 - HC - Service Tax

Whether Tribunal is right in holding that the assessee is not liable to pay Service tax on the demurrage tax collected by it - question falls squarely within the exception carved out in Section 35G, 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 purposes of assessment , and the High Court has no jurisdiction to adjudicate the said issue, in the case of M/s. Mangalore Refineries and Petro Chemicals Limited (2010 - TMI - 206880 - KARNATAKA HIGH COURT) , the appeal is rejected as not maintainable

Summary

Issues:
Whether the assessee is liable to pay service tax on demurrage charges collected by them?

Analysis:

The High Court of Karnataka heard an appeal where the revenue challenged a Tribunal order stating that the assessee is not liable to pay service tax on demurrage charges. The assessee, a liquor distribution corporation, charged demurrage fees for delayed goods removal from hired storage spaces. The Commissioner imposed service tax, but the Tribunal overturned it, citing the charges were not for services provided but for storage of their goods. The Tribunal highlighted that the charges were not lease rent and the Corporation only stored goods they owned, not providing storage services.

The primary issue before the court was whether the assessee should pay service tax on demurrage charges. The Court admitted the appeal to consider the legality of the Tribunal's decision. However, the Court noted that the issue fell under Section 35G, relating to excise duty or goods value determination, making it beyond the High Court's jurisdiction. The Court cited precedent, directing the Revenue to appeal to the Apex Court for resolution.

In conclusion, the High Court rejected the appeal's maintainability due to jurisdictional constraints, advising the Revenue to approach the Apex Court. The certified orders were to be returned to the Department for further action. The Court clarified that issues related to excise duty or goods value determination should be addressed by the Apex Court, emphasizing its exclusive jurisdiction in such matters.