2024 (12) TMI 272 - HC - Central Excise

Maintainability of appeal filed under Section 117 of the Central Goods and Service Tax Act, 2017 - Jurisdiction of the High Court versus the Supreme Court regarding appeals related to taxability of services rendered - appropriate forum - Interpretation of Section 35L of the Central Excise Act, 1944 - HELD THAT - Under Section 117 of the Act of 2017, an appeal lies to the High Court against any order passed by the Appellate Tribunal and the appeal may be admitted by the High Court subject to there being satisfaction that the case involves substantial question of law. The definition of Appellate Tribunal is found under Section 2 (9) of the Act of 2017 which again refers to Section 109 of the same Act. Section 109 provides for constitution of Appellate Tribunal and Benches thereof by the Government to be known as Goods and Services Tax Appellate Tribunal for hearing appeals under the order passed by the Appellate Authority or the Revisional Authority. No material has been placed to show that an Appellate Tribunal had been constituted in terms of the said provision. There also cannot be any dispute to the fact that an appeal to this Court under Section 117 would have to be an order passed by the Appellate Tribunal under Section 113 of the Act of 2017. It may be seen that apart from the orders passed by the High Court in an appeal filed under Section 35G or a reference under Section 35H, an appeal lies to the Supreme Court from any order passed by the Appellate Tribunal 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. Further, for the purpose of determining any question having relation to the rate of duty, the determination of taxability or excisability of goods would be included for the purpose of assessment. As may be noticed, the core issue which requires determination in the instant case is as to whether the services rendered by the respondent is taxable. Challenge made in COMMISSIONER, CENTRAL GOODS SERVICES TAX, GUWAHATI VERSUS M/S OIL INDIA LIMITED 2023 (5) TMI 440 - GAUHATI HIGH COURT was to the decision of CESTAT which held that the respondent-assessee was a seller and not a service provider and hence, in absence of service provider/service recipient relationship, there could not be any question of levy of service tax and therefore, the demand could not be sustained. Accordingly, the demand of service tax interest and penalty raised by the Adjudicating Authority and affirmed by the Appellate Authority was quashed and set aside. Coming back to the present case, upon having an overall consideration of the issue raised including the grounds of appeal taken by the appellant, since the issue of taxability of the services rendered by the respondent is the issue to be decided and therefore, the same squarely falls within the purview of the Hon ble Supreme Court under Section 35L of the Act of 1944. The appeal is therefore dismissed with liberty to the appellant to avail the remedy as is available in law.

Summary

Issues:
1. Maintainability of the appeal under Section 117 of the Central Goods and Service Tax Act, 2017.
2. Jurisdiction of the High Court versus the Supreme Court regarding appeals related to taxability of services rendered.
3. Interpretation of Section 35L of the Central Excise Act, 1944 in relation to the determination of taxability or excisability of goods for assessment purposes.

Analysis:

1. Maintainability of the appeal under Section 117:
The appeal was filed under Section 117 of the Act of 2017 against a Final Order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata. The respondent argued that the appeal was not maintainable under Section 117 as the Appellate Tribunal under the Act of 2017 had not been constituted. The respondent contended that appeals related to taxability issues should be directed to the Supreme Court under Section 35L of the Central Excise Act, 1944. The appellant argued that the services rendered by the respondent fell under Consulting Engineering Services as per the Finance Act, 1994, and therefore, the appeal should be heard on its merits by the High Court.

2. Jurisdiction of the High Court versus the Supreme Court:
The High Court deliberated on the jurisdictional aspect, emphasizing that an appeal under Section 117 of the Act of 2017 lies against orders passed by the Appellate Tribunal. However, the absence of evidence regarding the constitution of the Appellate Tribunal raised doubts on the High Court's jurisdiction. The respondent relied on a Co-ordinate Bench decision to support the argument that appeals concerning taxability issues should be directed to the Supreme Court under Section 35L of the Act of 1944. The High Court considered the core issue of taxability of services rendered by the respondent and concluded that such issues fall within the purview of the Supreme Court under Section 35L.

3. Interpretation of Section 35L of the Central Excise Act, 1944:
The High Court referred to a previous case where the issue of service tax interest and penalty on transportation services was deemed to be under the jurisdiction of the Supreme Court based on Section 35L of the Act of 1944. The Court noted that the determination of taxability or excisability of goods for assessment purposes falls within the scope of Section 35L. In the present case, the High Court determined that the issue of taxability of services rendered by the respondent aligns with the matters falling under the jurisdiction of the Supreme Court as per Section 35L.

In conclusion, the High Court dismissed the appeal, granting the appellant the liberty to seek appropriate legal remedies available. The judgment highlighted the importance of understanding the jurisdictional aspects concerning appeals related to taxability issues and the significance of Section 35L of the Central Excise Act, 1944 in determining the appropriate forum for such matters.