2018 (2) TMI 1613 - HC - Central Excise

Maintainability of appeal - Monetary amount involved in the appeal - classification of taxable service - Section 35G of the CEA 1944 - Held that - the dispute as to the classification of services is not maintainable before this Court under Section 35G of the Act - Even otherwise, ordinarily, as per the Litigation Policy following the instructions in F.No.390/Misc./163/2010-JC dated 17.12.2015, the value of the service tax disputed being less than ₹ 10,00,000/-, no appeal is maintainable - appeal dismissed.

Summary

Issues:
1. Classification of taxable service under Central Excise Act, 1944.
2. Maintainability of appeal under Section 35G of the Act.
3. Interpretation of Litigation Policy regarding appeal value threshold.

Classification of Taxable Service:
The appeal filed by the revenue challenges the order of the Tribunal regarding the classification of the service provided by the respondent. The revenue classified the services under 'Management or Maintenance or Repair Service', while the respondent argued that the activity amounted to 'manufacture' or 'Works Contract Service'. The dispute primarily revolves around the correct classification of the service for the purpose of service tax liability under the Finance Act, 1994.

Maintainability of Appeal:
The respondent raised objections on the maintainability of the appeal, citing a Division Bench judgment of the High Court which stated that disputes related to service tax payable, value of taxable service for assessment, and classification of services do not fall within the jurisdiction of the High Court under Section 35G of the Act. This position was further confirmed by the Apex Court in a subsequent appeal. The Court held that disputes regarding the classification of services are not maintainable under Section 35G of the Act.

Interpretation of Litigation Policy:
The Court considered the Litigation Policy and the instructions dated 17.12.2015, which stated that issues related to classification and refunds, which are legal or recurring in nature, are not covered under the Litigation Policy. Additionally, the Litigation Policy specified that appeals involving a service tax amount less than ?10,00,000 are not maintainable. The Tribunal clarified that the dismissal of a case under the Litigation Policy would not set a precedent for future cases. Therefore, the Court found no grounds to interfere with the order of the Tribunal and dismissed the appeal.

In conclusion, the High Court dismissed the appeal by the revenue, emphasizing that disputes related to the classification of services are not maintainable under Section 35G of the Act. The Court also highlighted the importance of adhering to the Litigation Policy guidelines, including the appeal value threshold, in determining the maintainability of appeals.