Commissioner Of Service Tax Kolkata vs. M/S Simplex Infrastructure Limited
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The Commissioner of Service Tax, Kolkata (Revenue) filed an appeal before the Calcutta High Court against an order passed by the Customs, Excise and Service Tax Appellate Tribunal (Tribunal). The appeal was filed with a delay of 166 days, for which an application for condonation was filed. The substantial question of law raised by the Revenue concerned the justification of the Tribunal's order, which was based on earlier Tribunal orders that were themselves under challenge before the Supreme Court. The assessee, M/s Simplex Infrastructure Limited, raised a preliminary objection regarding the maintainability of the appeal before the High Court under Section 35G of the Central Excise Act, 1944, arguing that the matter related to the taxability of services rendered to a Municipal Corporation.
Held
The Court held that the appeal filed by the Revenue is not maintainable before the High Court under Section 35G of the Central Excise Act, 1944. The Court found that the issue before the Tribunal concerned the taxability of services rendered by the assessee to the Indore Municipal Corporation for the construction of a sewerage system. This type of dispute, relating to the taxability of services rendered to a Municipal Corporation, falls under the purview of Section 35L of the Act, which mandates appeals to the Supreme Court. The Court relied on the insertion of sub-section (2) to Section 35L with effect from 6.8.2014, a clarifying circular from the Ministry of Finance, and the judgments of the Delhi High Court in CST vs. GEAS Services India Ltd. and the Punjab and Haryana High Court in Commissioner of Service Tax vs. DLF Golf Resorts Ltd. Consequently, the appeal was dismissed on the ground of non-maintainability. The substantial question of law was not dealt with and was left open for the Revenue to pursue the appropriate statutory remedy.
Key Issues
1. Whether the appeal filed by the Revenue before the High Court under Section 35G of the Central Excise Act, 1944 is maintainable, given that the dispute pertains to the taxability of services rendered to a Municipal Corporation, and whether such matters should be appealed before the Supreme Court under Section 35L of the Act. Petitioner/Appellant (Revenue) argued that the Learned Tribunal was not justified in passing the impugned order based on earlier Tribunal orders that were pending consideration before the Supreme Court in cases like Commissioner v. Lanco Infratech Ltd. and others, where interim stays were also granted. Respondent/Assessee argued that the appeal is not maintainable before the High Court under Section 35G of the Act because the matter relates to the taxability of services rendered to a Municipal Corporation. They relied on the insertion of sub-section (2) to Section 35L of the Act and a circular dated 10.7.2014, as well as decisions of the Delhi High Court in CST vs. GEAS Services India Ltd. and the Punjab and Haryana High Court in Commissioner of Service Tax vs. DLF Golf Resorts Ltd.
Sections Cited
Section 35G, Section 35L
AI-generated summary — verify with the full judgment below
od 3 IN THE HIGH COURT AT CALCUTTA SPECIAL JURI ICTION (CENTRAL EXCISE) ORIGINAL SIDE
CEXA/61/2024 IA NO: GA/1/2024, GA/2/2024 COMMISSIONER OF SERVICE TAX KOLKATA VS M/S SIMPLEX INFRASTRUCTURE LIMITED
BEFORE : THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM -A N D- HON'BLE JUSTICE HIRANMAY BHATTACHARYYA DATE : January 10, 2025. Appearance : Mr. Bhaskar Prosad Banerjee, Adv. Ms. Ekta Sinha, Adv. …for appellant. Mr. Rajeev Kumar Agarwal, Adv. Mr. Sanjoy Dixit, Adv. …for respondent.
The Court :- There is a delay of 166 days in filing the appeal. We have perused the affidavit filed in support of the application and we find that the reasons assigned for not preferring the appeal have been substantially explained. Hence, we are persuaded to exercise discretion in favour of the appellant/revenue and the delay is condoned. Application is allowed. This appeal has been filed by the revenue under section 35G of the Central Excise Act, 1944 challenging the final order no.77547 of 2023 dated 22.11.2023 passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata [Tribunal]. The revenue has raised the following substantial question of law for consideration. “Whether the Learned Tribunal is justified in passing the impugned order on the basis of earlier orders passed by the Learned Tribunal and when such orders of the Learned Tribunal have been challenged by the department and pending consideration of the legal issue by the Hon’ble Supreme Court in the case of [Commissioner v. Lanco Infratech Ltd. – 2016 (43) STR. J 78 (SC) which
2 has been admitted by the Hon’ble Supreme Court] and tagged with Civil Appeal Diary no.5887/2016 and that the other judgments of the Learned Tribunal have been challenged before the Supreme Court {Ramky Infrastructure Ltd. [2018 (12) G.S. T-L.32 (Tri – Del.)], Indian Hume Pipe Co. Ltd. [2015 (40) ST.R 214 (Mad.)], Jyoti Buildtech (P) [2017 (3) G.S.T.L. 116 (Tri – All.)]} and were admitted by the Hon’ble Supreme Court and tagged with other matters and further the Hon’ble Supreme Court has granted an interim stay order against the judgment passed by the Learned Tribunal in the case of M/s. Shriram EPC Ltd. vs. Commissioner of GST and C. Ex.”
We have heard learned Advocates on either side. The learned advocate appearing for the respondent/assessee has raised a preliminary objection as regards maintainability of this appeal before this court under section 35G of the Act on the ground that the matter relates to the taxability of the services which has been rendered by the assessee to Municipal Corporation. On perusal of the order passed by the learned Tribunal we find the question which arises for consideration before the learned Tribunal was whether service tax is payable under the category of “Works Contract Services” on services rendered by the assessee to the Indore Municipal Corporation for construction of sewerage system including laying of pipes and allied works under JNNURM. Thus, it is evident that the issue pertains to the taxability of the services rendered by the respondent/assessee to the Municipal Corporation. Sub-section (2) to Section 35L of the Act was inserted with effect from 6.8.2014 by Section 107 of the Finance Act (2) Act, 2014 and that the amendment was clarificatory was accepted by the department. In this regard, the Ministry of Finance, Department of Revenue, Tax Research Unit has issued circular dated 10.7.2014 which refers to the bill introduced in the Lok Sabha by the Hon’ble Finance Minister. It has been clarified by the said circular that section 35L is being amended so as to clarify
3 that determination of disputes relating to taxability or excisable of goods is covered under the term “Determination of any question having a relation to the rate of duty” and, hence, appeal against Tribunal order in which matters would lie before the Hon’ble Supreme Court. This very issue was considered by Hon’ble Division Bench of This decision was followed by the Hon’ble Division Bench of the High Court of Punjab 2017 (7) GSTL 202 (P & H). In the said decision it has been held that the appeal does not lie before the High Court under Section 35G of the Act but appeal would lie before the Hon’ble Supreme Court under Section 35L of the Act. In the above circumstances, the appeal is liable to be dismissed on the ground that it is not maintainable under Section 35G of the Act and, accordingly, the same stands dismissed. Since the appeal has been dismissed on the ground it is not maintainable, the substantial question of law framed for consideration has not been dealt with and it is left open to the revenue to avail the statutory remedy.
(T.S. SIVAGNANAM) CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.)
pkd/GH.
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.