2019 (4) TMI 811 - HC - Central Excise

Maintainability of appeal before High Court - Valuation - Business Auxiliary Service - inclusion of receipt of Airlines incentive for booking in assessable value - Held that - Both these issues namely valuation of services as well as the exemption from Service Tax i.e. rate of duty would be a subject matter of appeal before the Supreme Court in view of Section 83 of the Finance Act, 1994 read with Section 35G(1) and 35L(1)(b) of the Act - Therefore, this appeal in respect of valuation and rate of duty is subject to appeal before the Supreme Court and not this Court. Appeal dismissed as not maintainable.

Summary

Issues:
Entitlement to exemption under Notification No.4/2004 S.T. and valuation of taxable service.

Entitlement to Exemption:
The appeal challenged the order passed by the Tribunal regarding the entitlement to exemption under Notification No.4/2004 S.T. The Tribunal's order related to the claim for exemption from tax on services provided to a company in a Special Economic Zone. The issue revolved around whether the services rendered in connection with the import and export of goods qualified for the exemption. The Tribunal's decision was crucial in determining the taxability of the services provided during a specific period. The matter of exemption from Service Tax under the mentioned notification was a significant aspect of the appeal.

Valuation of Taxable Service:
Another crucial issue in the appeal was the valuation of taxable services under Business Auxiliary Service. The Tribunal's decision was questioned regarding the inclusion of Airlines' incentive for booking in the value of services under Business Auxiliary Service. The appellant contested the Tribunal's ruling on the valuation of services, particularly concerning the surplus generated by advance booking of space for air freight. The determination of the correct valuation of services was a key point of contention in the appeal.

Judgment:
The High Court noted that the issues raised in the appeal pertained to the exemption from Service Tax and the valuation of services, which were subject to appeal before the Supreme Court. The Court observed that the appeal concerning the valuation and rate of duty fell under the jurisdiction of the Supreme Court as per the relevant sections of the Finance Act, 1994 and the Central Excise Act, 1944. Consequently, the High Court disposed of the appeal as not maintainable before it, indicating that the matter should be pursued before the Supreme Court for a final decision on the valuation of services and the entitlement to exemption under the specified notification.