Commissioner Of Central Excise & Customs, Surat - I vs. M/S Neo Structo Construction LTD

Held

The High Court held that both appeals were not maintainable before it. The Court's reasoning was based on Section 35L(b) of the Central Excise Act, 1944, which stipulates that an appeal shall lie to the Supreme Court from any order passed by the Appellate Tribunal before the establishment of the National Tax 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. The Court noted that the impugned orders passed by the Appellate Tribunal pertained to the rate of duty of service tax. Consequently, the Court disposed of both appeals as not maintainable before the High Court, without expressing any opinion on the merits of the substantial questions of law. The connected Civil Application No. 1578 of 2020 was also disposed of as a consequence. The parties were granted liberty to take appropriate steps in accordance with law before the appropriate forum.

Facts

The Commissioner of CGST and Central Excise filed Tax Appeal No. 2332 of 2010 and F/Tax Appeal No. 2258 of 2020 before the Gujarat High Court. These appeals challenged orders passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dated April 26, 2010, concerning service tax liability. The appeals were admitted on two substantial questions of law. The petitioner, the Excise Department, argued that the CESTAT had erred in holding that the respondent's activity was fabrication and not covered under "erection of plant, machinery, or equipments," and that it was not exigible to service tax prior to May 1, 2006. The petitioner also argued that the CESTAT erred in holding the activity as manufacturing under Section 2(f) of the Central Excise Act, 1944, thus exempting it from service tax under "Erection Commissioning and Installation Service."

Key Issues

1. Whether, in the facts and circumstances, the Tribunal committed a substantial error in holding that the respondent's activity was fabrication of structure, not covered by "erection of plant, machinery, or equipments," and thus not exigible to service tax prior to May 1, 2006, under Section 65(39a) of the Finance Act, 2004? 2. Whether, in the facts and circumstances, the Tribunal committed a substantial error of law in holding that the respondent's activity is covered under Section 2(f) of the Central Excise Act, 1944, as manufacturing activity, and therefore, the respondent is not liable to pay service tax under the category of "Erection Commissioning and Installation Service"? Petitioner's Contention: The petitioner (Excise Department) argued that the appeals were not maintainable before the High Court, citing Section 35L(b) of the Central Excise Act, 1944. They contended that the impugned orders related to the rate of duty of service tax, and therefore, the appeal should lie before the Supreme Court. Respondent's Contention: The judgment does not record any specific arguments made by the respondent on the merits of the case.