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2022 (10) TMI 924 - HC - Service TaxJurisdiction - appropriate forum - High Court or Supreme Court - Classification of services - Erection Commissioning or installation Service or not - laying connecting joining pipeline for water supply project - entitlement for abatement under N/N.1 of 2006 dated 1 st March 2006 - HELD THAT - Sub-section (2) to section 35L was inserted with effect from 6th August 2014 i.e. prior to the passing of the order impugned in the present appeal by the CESTAT. Even otherwise this Court in the case of THE COMMISSIONER OF CENTRAL EXCISE MUMBAI V COMMISSIONERATE VERSUS M/S. RELIANCE MEDIA WORKS LTD. (FORMERLY KNOWN AS M/S. ADLABS FILMS LTD.) SHRI VASANJI ASARIA MAMANIA SHRI SATYAJEET MUKHERJEE 2019 (12) TMI 392 - BOMBAY HIGH COURT has held that insertion of sub-section (2) to section 35L was clarificatory and therefore the issue of taxability and excisability would be an issue relating to rate of duty of excise/services for the purpose of assessment for which an appeal from the order of the Tribunal could be entertained only by the Hon ble Supreme Court and not by the High Court in terms of sections 35G of the Excise Act. In view of the clear mandate sub-section (2) of section 35L of the Excise Act since the issue involved in the present appeal pertains to whether the service rendered by the assessee is a taxable service or not this Court would have no jurisdiction to entertain the appeal. The present appeal is not maintainable before this Court leaving it free to the appellant to avail its remedies under law - Appeal dismissed.
Issues:
1. Whether laying, connecting, joining pipeline for water supply project falls within "Erection, Commissioning or installation Service" as defined under section 65(105)(zzd) of the Finance Act, 1994 and is taxable under the Service Tax? 2. Whether the respondent-assessee is entitled for abatement under Notification No.1 of 2006, dated 1st March 2006? Analysis: Issue 1: The case involved the question of whether the activity of laying pipelines for water supply projects falls under the category of "erection, commissioning, and installation service" as defined in the Finance Act, 1994. The Tribunal, in its order, relied on precedents and circulars to determine that laying pipelines does not constitute erecting, installing, or commissioning plant, machinery, equipment, or structure. It was held that pipelines do not fall under the definition of taxable services as per section 65(105)(zzd) of the Finance Act, 1994. The Tribunal also cited a similar case involving submarine pipelines and concluded that laying pipelines is more appropriately classified under "commercial or industrial construction service" rather than erection, commissioning, or installation service. Issue 2: The second issue pertained to the entitlement of the respondent-assessee for abatement under Notification No.1 of 2006, dated 1st March 2006. The Tribunal allowed the appeal of the assessee, setting aside the order passed by the Adjudicating Authority, which had initially held that the service tax rendered by the assessee fell under the category of "erection, commissioning, and installation service." The Tribunal's decision resulted in the dismissal of the appeal filed by the revenue. Counsel for the respondent supported the Tribunal's view by referencing a previous judgment and questioning the maintainability of the appeal before the High Court based on the provisions of section 35L of the Central Excise Act, 1944. The High Court, after considering the arguments presented, held that the appeal was not maintainable before the Court due to jurisdictional issues. The Court cited a previous case to support its decision, stating that the issue of taxability and excisability falls under the purview of the Supreme Court as per the provisions of section 35L of the Excise Act. Consequently, the Court disposed of the appeal, leaving the appellant free to pursue remedies under the law.
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