2012 (8) TMI 606 - HC - Service Tax

Demand of service tax - services charges for technical know-how and technical assistance Held that - Question falls squarely within the exception carved out in Section 35G, 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 - appeal is rejected as not maintainable

Summary

Issues:
1. Appellant challenging Tribunal's order on service tax liability.
2. Interpretation of agreement for technical know-how and assistance.
3. Jurisdiction of High Court in matters related to rate of duty/tax.

Analysis:
1. The appellant challenged the Tribunal's order, contending that the assessee is not liable to pay service tax for technical know-how and assistance provided under an agreement. The Assistant Commissioner initially dropped the proceedings, considering the transaction as a sale of property rather than a service. However, the Commissioner disagreed and levied service tax, interest, and penalty. The Tribunal, in line with its previous judgments, ruled in favor of the assessee, leading to the revenue's appeal.

2. The crux of the issue lies in determining whether the payments made under the agreement constitute a service liable for service tax. The assessee argued that the transaction involves a license for the manufacture and sale of patented goods, making it a sale of property rather than a service. The Commissioner's order to levy service tax was based on a different interpretation, leading to the Tribunal's intervention and subsequent decision favoring the assessee.

3. The High Court, while acknowledging the appeal, highlighted that the question of service tax liability falls under the exception in Section 35G related to the rate of duty/tax determination. Citing precedent, the Court clarified that it lacks jurisdiction to adjudicate on such matters, emphasizing the exclusive authority of the Apex Court under Section 35L of the Central Excise Act, 1944. Consequently, the appeal was deemed not maintainable, with the Revenue advised to approach the Apex Court for resolution.

In conclusion, the High Court rejected the appeal challenging the service tax liability determination, emphasizing the need for the Revenue to seek resolution through the Apex Court due to jurisdictional constraints. The detailed analysis of the agreement, interpretation of the transaction, and the legal framework surrounding tax determination underscore the complexity of the issue at hand and the need for specialized adjudication in such matters.