Commissioner Of Central Goodsandser Tax vs. Ms Jain Poles Industries
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The Commissioner of Central Goods and Service Tax (Appellant) filed an appeal before the Rajasthan High Court against an order dated 09.08.2017 passed by the Excise & Service Tax Appellate Tribunal. The appeal was filed under Section 35G of the Central Excise Act, 1944. The Respondent, M/s Jain Poles Industries, raised an objection to the maintainability of the appeal before the High Court. The Appellant contended that the case did not fall under the exceptions provided in Section 35G(1) of the Act, while the Respondent argued that the withdrawal of SSI Exemption would make excise duty leviable, thus falling within the exceptions. The dispute involved the eligibility of the respondent for SSI Exemption, which was allegedly withdrawn by the Department due to the respondent having three undertakings, potentially affecting the turnover threshold for exemption.
Held
The Court held that the appeal is not maintainable before the High Court. The reasoning was based on a careful perusal of Section 35G(1) of the Central Excise Act, 1944, which states that an appeal shall lie to the High Court if it involves a substantial question of law, but not if the order relates to the 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. The Court found that in the present case, the withdrawal of SSI Exemption would lead to excise duty becoming leviable, which directly relates to the rate of duty of excise. Furthermore, if the exemption is withdrawn, the goods would be valued for the purpose of assessment, thus falling within the exception provided under Section 35G(1). The Court also noted that if the three undertakings were treated as one, the value of goods for assessment purposes would be affected. Therefore, the dispute pertained to the rate of duty or the value of goods for assessment, for which there is a specific bar on entertaining the appeal. The ratio decidendi is that appeals concerning the determination of the rate of duty or the value of goods for assessment are barred from High Court jurisdiction under Section 35G(1) of the Central Excise Act, 1944.
Key Issues
1. Whether the present appeal filed by the Appellant under Section 35G of the Central Excise Act, 1944, is maintainable before the High Court? (Question of law and mixed fact and law, turning on Section 35G(1) of the Central Excise Act, 1944). The Appellant argued that the judgment in "M/s Navin Chemicals Mfg. And Trading Co. Limited Vs. Collector of Customs: 1993(4) SCC 320" was not applicable as it pertained to Section 129C of the Customs Act, 1962, and not Section 35G of the Central Excise Act, 1944, and that the provisions were not pari materia. The Appellant further contended that the bar under Section 35G(1) would not apply and the High Court has jurisdiction, relying on "Sunsuk Industries vs. Commissioner of Central Excise, Mumbai-IV", "Annapoorna Re-Rolling (P) Ltd. vs. Cestat, Chennai", "Expo-Fyn Electricals & Electronics vs. Commissioner of C. Ex. Jaipur-I", and "Principal Commissioner of Central GST vs. Maniar And Co.". The Respondent argued that if SSI Exemption is withdrawn, excise duty becomes leviable, which falls within the exception under Section 35G of the Act. They relied on "Commissioner of Central Excise, Jaipur vs. Electro-Mechanical Engineering Corporation & Ors.", "Commissioner of Service Tax, Delhi vs. Bharti Airtel Ltd.", and "Commissioner of Customs & C. Ex., Goa vs. Primella Sanitary Products (P) Ltd.", noting that the latter case involved Section 35H and concerned the determination of the rate of duty or value of goods.
Sections Cited
Section 35G, Section 35H
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
Order REPORTABLE 27/02/2024
Appellant has preferred this appeal under Section 35G of the Central Excise Act, 1944 aggrieved by the order dated 09.08.2017 passed by Excise & Service Tax Appellate Tribunal.
Since an objection to the maintainability of this appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as the 'Act') was raised by the counsel for the respondent, vide order dated 14.07.2023, time was given to the counsel for the appellant to examine the issue with reference to the decision cited by counsel for the respondent in "M/s Navin Chemicals Mfg. And Trading Co. Limited Vs. Collector of Customs: 1993(4) SCC 320."
Heard on the question of maintainability of the present appeal before the High Court.
It is contended by counsel appearing for the appellant that the judgment referred to by counsel for the respondent i.e. M/s Navin Chemicals Mfg. And Trading Co. Limited (supra), has no
[2024:RJ-JP:9941-DB] (2 of 5) [EXCIA-75/2018] applicability to the present case, as that case was with regard to Section 129C of the Customs Act, 1962, whereas the present case pertains to Section 35G of the Act. It is also contended that the said provisions are not pari materia, therefore, this judgment would not apply to the facts of the present case.
It is contended by counsel for the appellant that SSI Exemption is available only when turnover is less than Rs.1 crore. The respondent has three Undertakings, therefore, they were not entitled to exemptions and SSI Exemptions were withdrawn by the Department. It is also contended that bar as provided under Clause (1) of Section 35G of the Act would not apply and the High Court shall have juri iction to entertain the appeal.
Counsel appearing for the appellant has placed reliance on "Sunsuk Industries vs. Commissioner of Central Excise, Mumbai- IV: 2018 (16) G.S.T.L. 469 (Bom.)"; "Annapoorna Re-Rolling (P) Ltd. vs. Cestat, Chennai: 2018 (14) G.S.T.L. 512 (Mad.)"; "Expo-Fyn Electricals & Electronics vs. Commissioner of C. Ex. Jaipur-I: 2018(8) G.S.T.L. 160 (Raj.)" and "Principal Commissioner of Central GST vs. Maniar And Co.: 2018 (16) G.S.T.L. 85 (Guj.)".
Counsel appearing for the respondent has opposed the appeal and contends that if SSI Exemption is withdrawn, the excise duty would become leviable, therefore, the same would fall within the exception as provided under Section 35G of the Act.
Counsel for the respondent has placed reliance on "Commissioner of Central Excise, Jaipur vs. Electro-Mechanical Engineering Corporation & Ors.: 2008 (17) SCC 177" an appeal was filed by the Commissioner Central Excise before the Apex
[2024:RJ-JP:9941-DB] (3 of 5) [EXCIA-75/2018] Court when the benefit of SSI exemption was denied by the Revenue on the ground that respondent had floated two front units in order to fraudulently avail the SSI Exemption.
It is argued that appellant at one hand is approaching the Apex Court as there is exception under Section 35G of the Act and on the other hand, appellant is approaching the High Court claiming that the case would not fall under the exception under Section 35G of the Act.
Counsel for the respondent has also placed reliance on "Commissioner of Service Tax, Delhi vs. Bharti Airtel Ltd.: CEAC No.8 of 2013 and CM Nos.1975-1976 of 2013. decided on 26.02.2013" & "Commissioner of Customs & C. Ex., Goa vs. Primella Sanitary Products (P) Ltd.: Misc. Civil Application No.344 of 2001, decided by Bombay High Court on 18.02.2002."
It is argued that Primella Sanitary Products (P) Ltd. (supra) was a case pertaining to Section 35H of the Act, wherein the Bombay High Court held that application filed by the applicant raises issue which relates to the determination of a question having relation to the rate of duty of excise or of the value of the goods for the purposes of assessment and, as such, a reference under Section 35H of the Act is not maintainable.
We have considered the arguments and have carefully perused Section 35G of the Act.
Section 35G(1) of the Central Excise Act, 1944, reads as under:- "Appeal to High Court- (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order
[2024:RJ-JP:9941-DB] (4 of 5) [EXCIA-75/2018] 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), if the High Court is satisfied that the case involves a substantial question of law."
A perusal of the above provision reveals that an appeal would lie to the High Court, if the High Court is satisfied that the case involves a substantial question of law, however, appeal would not lie, if the same pertains to determination of any question having relation to the rate of duty of excise or to the value of goods for purposes of assessment.
In Commissioner of Central Excise, Jaipur vs. Electro- Mechanical Engineering Corporation & Ors. (supra), appeal was filed by the Commissioner of Central Excise, when the benefit of SSI Exemption was denied by the Revenue on the ground that respondent had floated two front units in order to fraudulently avail the SSI Exemption. The said appeal was filed before the Apex Court knowing pretty well that appeal is not maintainable before the High Court. In that case, appeal was entertained by the Apex Court. The Division Bench of the Bombay High Court in Commissioner of Customs & C. Ex., Goa (supra) held that a reference under Section 35H of the Act is not maintainable where the issue relates to the determination of a question having relation to the rate of duty of excise or to the value of the goods for the purposes of assessment.
We are of the considered view that in the case in hand, SSI Exemption for payment of central excise duty has been granted to the respondent. If this exemption is withdrawn, excise duty would become leviable and consequently, it would be an order relating among other things to the determination of any question having a
[2024:RJ-JP:9941-DB] (5 of 5) [EXCIA-75/2018] relation to the rate of duty of excise. Further, if the exemption is withdrawn, the goods will be valued for the purpose of assessment and thus, it would fall within the exception as provided under Clause (1) of Section 35G of the Act. Similarly, if three Undertakings are treated as one Undertaking, then for the purpose of determination, the value of goods would also be assessed of the three Undertakings together, thus the dispute would pertain to value of goods for purpose of assessment and thus the same would not fall within the juri iction of the High Court. There being a specific bar on entertaining of appeal, if the question pertains to rate of duty of excise or the value of goods for the purpose of assessment, the present appeal is not maintainable before the High Court.
In view of the above, we are not inclined to entertain the present appeal on the ground of lack of juri iction and the same is accordingly, dismissed as not maintainable. Stay application also stands disposed. (SHUBHA MEHTA),J (PANKAJ BHANDARI),J AMIT/23
Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.