2023 (10) TMI 64 - HC - Service Tax

Appropriate Forum - Hon ble Supreme Court or otherwise - Levy of service tax - amount received against WRP Way maintenance labour service by the Respondent is towards maintenance of Railway Tracks - Cleaning of Station services - W R Grinding FB Welding services falls under the category of Repairs and Maintenance of Railway Tracks as a original work - serial No. 12 of the Notification No. 25/2012-ST dated 20.06.2012 - Corroborative evidences or not - shared data of noticee by the Income tax department can be used against the applicant without carrying out Independent inquiry / investigation by the Applicant Department or not. Whether the order-in-original under challenge involves a question relating to determination of rate of duty of excise or the value of goods for the purposes of assessment of duty as appearing in Section 35G(1) and 35L(b) and therefore for the issue involved in the present appeal, the appeal would only be maintainable before the Hon ble Supreme Court? HELD THAT - Reading the question of law framed indicates that the issue under consideration is as to whether the assessee was eligible for exception / exemption under Notification No. 25 of 2012. The exemption if denied, would require adjudication on rate of duty and therefore the appeal would fall under the caption 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 . Essentially even if it is the contention of the appellant that from the year 2012, a negative list of services was prescribed and therefore there is no classification of service left open, the case of Saumya Construction Pvt. Ltd. 2014 (12) TMI 127 - GUJARAT HIGH COURT where it was held that As can be seen on a combined reading of Section 35G and Section 35L of the Act, if the order of the Tribunal relates to determination of the rate of duty, the appeal would lie before the Supreme Court and not before the High Court. Even the Karnataka High Court in the case of Scott Wilson 2011 (4) TMI 500 - KARNATAKA HIGH COURT held that it is clear that an order passed by the Appellate Tribunal relating to the determination of any question having relation to the rate of service taxes or to the value of services for the purposes of assessment lies to the Supreme Court under Section 35L(b) of the Act and not to the High Court under Section 35(G). This appeal under Section 35G, on the substantial questions of law raised, is not maintainable and is therefore accordingly dismissed.

Summary

Issues Involved:
1. Whether shared data from the Income Tax Department can be used without independent inquiry.
2. Whether demand can be confirmed without specifying the service under which the activity is covered.
3. Whether the amount received for WRP Way maintenance labor service is exempt under Notification No. 25/2012-ST.
4. Whether Cleaning of Station services is exempt under Notification No. 25/2012-ST.
5. Whether W R Grinding FB Welding services fall under Repairs and Maintenance and are exempt.
6. Whether new arguments claiming exemption under a different notification can be adjudicated.
7. Whether income from Western Railway is considered manpower recruitment/supply services.

Summary:

1. Preliminary Objection on Maintainability:
Mr. Dhaval Shah argued that the appeal is not maintainable before the High Court as it involves questions relating to the "determination of rate of duty of excise or the value of goods for the purposes of assessment" under Sections 35G(1) and 35L(b). He cited multiple precedents to support this claim, emphasizing that such matters should be appealed to the Supreme Court.

2. Appellant's Response:
Ms. Hetvi Sancheti contended that post-2012, with the introduction of the negative list of services, there is no classification of services left open, and the rate of tax is uniform. She argued that the appeals are maintainable before the High Court as they do not pertain to the determination of the rate of duty or value of goods.

3. Tribunal's Findings on Exemption:
The Tribunal held that services provided to the Government, including maintenance of unmanned railway crossings, railway tracks, and cleaning of stations, are exempt under Sr. No. 12 of Notification No. 25/2012-ST. It was concluded that these activities do not fall under manpower recruitment/supply services and are not liable for service tax.

4. High Court's Analysis:
The High Court referred to multiple judgments to determine the maintainability of the appeal. It was concluded that the issues raised pertain to the classification of services and their eligibility for exemption, which directly relate to the rate of duty. Therefore, such matters should be appealed to the Supreme Court under Section 35L(b).

5. Conclusion:
The High Court dismissed the appeal under Section 35G, stating it is not maintainable as it involves questions relating to the rate of duty and the value of services for assessment. The appeal should be filed before the Supreme Court.