2020 (2) TMI 630 - HC - Service Tax

Maintainability of appeal - appropriate forum - whether the subject matter of this appeal involved determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment? - Works contract service - service tax liability of the assessee for the period prior to 1st June, 2007 pre-dominantly and minimally for the period 1st June, 2007 till 30th September, 2007 - HELD THAT - Sub- Section (2) of Section 35L (1b) of the Central Excise Act, 1944, clarifies that the determination of the above question shall include the determination of taxability or excisability of the goods. The above section provides that if the issue in appeal relates to any of the above matters then the appeal lies to the Supreme Court. Mr. Chakraborty, learned senior advocate for the respondent, submitted that this court had no jurisdiction, as the above questions were involved. The entire issue which is before us in the appeal by the revenue is whether the service rendered by the assessee during the material period was a works contract and exempt from service tax or erection, commissioning and installation service. Furthermore, whether during the material period the assessee was exigible to service tax for the service rendered - From the above analysis it is absolutely clear that the above issue has a direct relation to the rate of duty or to the value of goods. This court has no jurisdiction under Section 35G of the Excise Act, 1944 to entertain, try and determine the appeal - Appeal is dismissed on the point of maintainability.

Issues:
1. Jurisdiction of the court to determine the appeal related to service tax liability.
2. Whether the service rendered by the assessee was a works contract exempt from service tax or an erection, commissioning, and installation service.
3. Exigibility of service tax for the service rendered during the material period.

Analysis:
1. The primary issue before the court was to determine the jurisdiction under Section 35G of the Central Excise Act, 1944, to hear the appeal related to the service tax liability. The court considered if the appeal involved questions directly related to the rate of duty or the value of goods for the purpose of assessment, which would fall under the jurisdiction of the Supreme Court as per Section 35L(1b) of the Act. The court held that the appeal did indeed involve such questions, leading to the dismissal of the appeal on the point of maintainability.

2. The case involved the service tax liability of the assessee for the period before 1st June 2007, primarily, and minimally for the period from 1st June 2007 to 30th September 2007. The assessee had entered into agreements for the supply of plant, machinery, and works contract services with clients. The revenue argued that the assessee failed to value the services correctly, leading to a short payment of service tax. The tribunal had previously held that the service was appropriately classifiable under Works Contract Service and not chargeable to service tax before 1st June 2007. However, for the period after 1st June 2007, the service tax was paid under a different category, which required recomputation.

3. The court further delved into whether the service rendered by the assessee during the material period was a works contract exempt from service tax or an erection, commissioning, and installation service. The issue revolved around the classification of the service provided and whether the assessee was exigible to service tax for the service rendered during the relevant period. The court clarified that it did not assess the merits of the dispute regarding classification and duty payable but focused on the jurisdictional aspect of the appeal.

In conclusion, the High Court of Calcutta dismissed the appeal on the grounds of lack of jurisdiction under Section 35G of the Central Excise Act, 1944, to entertain and determine the appeal related to service tax liability. The court emphasized that the appeal involved questions directly related to the rate of duty or the value of goods, falling under the jurisdiction of the Supreme Court.

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