High Court
Legal Reasoning
IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCENTRAL EXCISE APPEAL NO.5 OF 2023Commissioner of Customs, Central Exciseand Service Tax, Aurangabad,N-5, Town Centre, CIDCO,Aurangabad – 431 003. … Appellant… Versus …M/s. Shyam Electrical Stores,Station Road, Parli (Vaijnath),Dist. Beed. … Respondent...Mr. D.S. Ladda, Advocate for appellantMr. Alok Sharma, Advocate for sole respondent...WITHCENTRAL EXCISE APPEAL NO.4 OF 2023Commissioner of Customs, Central Exciseand Service Tax, Aurangabad,N-5, Town Centre, CIDCO,Aurangabad – 431 003. … Appellant… Versus …M/s. Pratibha Electrical Engineers,7, Mondha Road, Ambajogai,Dist. Beed. … Respondent
Legal Reasoning
2CEA_5_2023+1_Jd...Mr. D.S. Ladda, Advocate for appellantMr. Alok Sharma, Advocate for sole respondent...CORAM :SMT. VIBHA KANKANWADI &S.G. CHAPALGAONKAR, JJ.DATE:25th JANUARY, 2024JUDGMENT :(PER : SMT. VIBHA KANKANWADI, J.)1Central Excise Appeal No.5 of 2023 has been filed by theDepartment aggrieved by the Judgment and order dated 23.07.2020 passedby Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench atMumbai in CESTAT Appeal No.ST/87239/2015 vide CESTAT Final OrderNo.A/85805-85814/2020 and Order dated 09.06.2015 passed by theCommissioner (Appeals) Central Excise, Customs and Service Tax,Aurangabad vide Order No.21/ST/COMMR/2015; and Central Excise AppealNo.4 of 2023 has been filed by the Department aggrieved by the Judgmentand order dated 23.07.2020 passed by Customs, Excise and Service TaxAppellate Tribunal, West Zonal Bench at Mumbai in CESTAT AppealNo.ST/87238/2015 vide CESTAT Final Order No.A/85805-85814/2020 andOrder dated 09.06.2015 passed by the Commissioner (Appeals) CentralExcise, Customs and Service Tax, Aurangabad vide Order 3CEA_5_2023+1_JdNo.20/ST/COMMR/2015. 2The respondent is engaged in providing erection, commissioningand installation services to M/s. M.S.E.D.C.L. and the assessee had filed VCESDeclaration on 26.12.2013 in VCES-1 in terms of Section 107(1) of theService Tax Voluntary Compliance Encourage Scheme, 2013 for availingbenefits under the said scheme for the period between October, 2007 toDecember, 2012. The tax dues were declared at Rs.49,05,633/- andRs.88,35,008/- respectively. According to the assessee, the service taxliability under VCES was substantially false and, therefore, show causenotices came to be issued on 15.12.2014 and 10.12.2014 respectively anddemand of service tax of Rs.1,49,72,282/- and Rs.2,65,45,515/- respectivelycame to be issued. Those show cause notices were challenged by therespondents by filing Original No.21/ST/COMMR/2015 dated 09.06.2015and Original No.20/ST/COMMR/2015 dated 09.06.2015 respectively.However, adjudicating authority held that the VCES Declaration filed by therespondent assessee is true and correct. The notices were directed to bewithdrawn. The appellants had then preferred the appeals before theAppellate Tribunal. The Appellate Tribunal has also dismissed the appealsand upheld the declaration by the assessee. Hence, the present appeals. 4CEA_5_2023+1_Jd3It appears that some point in respect of maintainability came tobe raised by the respondents themselves, however, the said issue has beensettled in Asean Cableship Private Limited vs. Commissioner of Customs[2022 SCC OnLine SC 1640]. The question that was considered in theSpecial Leave Petition by the Hon’ble Supreme Court was – Whether againstthe order passed by the CESTAT impugned before the High Court the appealwould be maintainable before the High Court under Section 130(1) of theAct or the appeal before Hon’ble Supreme Court would be maintainableunder Section 130E(b) of the Act ? It was just held that the said appeal wasmaintainable. In Three Judge Bench decision of the Hon’ble Supreme Courtin Commissioner of Customs, Bangalore-1 vs. Motorola India Limited [(2019)9 SCC 563] also the said ratio has been laid down. It appears that thedepartment has filed appeal under Section 35G of Central Excise Tax Act.Before the Full Bench of this Court in Commissioner of Central ExciseMumbai vs. M/s. Reliance Media Works Limited (formerly known as M/s.Adlabs Film Limited), Mumbai [(2020) 2 AIR BomR 520] the points forreference were as under :“a)Whether the question of taxability or excisability of goods is anissue of rate of duty arising from orders of the Tribunal which areappealable only to the Supreme Court in terms of Section 35L(2) ofthe Act applies even to appeals from order of the Tribunal passed 5CEA_5_2023+1_Jdprior to 6th August, 2014 (i.e. the date of insertion of sub-section (2)to Section 35L of the Act) ?b)Whether the amendment made to Section 35L of the Act on 6thAugust, 2014 by insertion of sub-section (2) therein, is clarificatory orprospective in nature ?”While answering to the points for reference, the Full Bench inparagraph No.9 has held as under : “9.In view of our above discussion, we now answer the questionsposed in the reference for our opinion as under : Regarding question (a) – Appeals from orders of the Tribunal relatingto taxability or excisability passed prior to 6th August, 2014 i.e. thedate of insertion of sub-section (2) to Section 35L of the Act being arate of duty issue would be appealable only to the Hon’ble SupremeCourt and not the High Court.Regarding question (b) – The amendment made to Section 35L of theAct is clarificatory in nature and, therefore, retrospective inoperation.”Here, in the present case, the show cause notices were issued onthe ground that under the voluntary scheme the declaration is not properlygiven. In fact, both the Courts below were against the department. In viewof the fact that there were certain Government Resolutions, on the basis ofwhich it was held that the respondent was not liable to pay the tax amount,but it was exempted. As regards to whatever period the respondent was held 6CEA_5_2023+1_Jdliable to pay in respect of the said calculation he has already deposited thesaid amount. Therefore, it was the interpretation of the contents in thescheme and also whether the exemption has been rightly claimed or not.Therefore, the subject is squarely covered in the ratio laid down in MotorolaIndia Limited (supra). Whether the assessee had violated the conditions ofthe exemption Notification and, therefore, was libale to pay the duty, interestand penalty was involved and, therefore, it is held that the appeal quaviolated of conditions of exemption Notification by assessee is maintainablebefore High Court. 4Now, turning towards the fact of the case, unless it is shown thatthe present appeals involved substantial question of law, no question ofgranting any relief or even admitting the appeals arises. The learnedAdvocate for the respondent has placed on record copy of certain resolutionsin respect of exemption to services provided for transmission of electricity. ByNotification dated 27.02.2010 the taxable service provided to any person, byany other person for transmission of electricity, from the whole of service taxlevy was exempted from 27.02.2010. Even the person was also heldexempted from taxable service provided for the distribution of electricity andit was with effect from 22.06.2010. Further, by Notification dated20.07.2010 retrospective exemption for transmission till 26.02.2010 and 7CEA_5_2023+1_Jddistribution of electricity till 21.06.2010 was granted. However, byNotification dated 20.06.2012 the Central Government rescinded theNotifications dated 27.02.2010 and 22.06.2010. It appears that in both thematters the service tax liability was shown in the notices as Rs.1,49,72,282/-and Rs.2,65,45,515/- respectively. Both the authorities below have thentaken note of various Notifications issued by the Government and held thatthe demand of service tax under VCES, 2013 pertaining to period from01.10.2007 to 30.06.2012 is not sustainable. Rather it was found that therespondent has paid more amount than liable, but in view of Section 109 ofthe Finance Act, 2013 detailing provisions of VCES, 2013 stipulated that “Anyamount paid in pursuance of a declaration made under sub-section (1) ofSection 107 shall not be refundable under any circumstances.”; the petitioneris not entitled to get back the excess amount. The wordings of the exemptiongranted under the Notification is certainly binding on the appellantdepartment and, therefore, the competent authority below were justified inwithdrawing the show cause notices. There is absolutely no merit in theappeals. Accordingly, both the appeals stand dismissed at the threshold, asthere is no substantial question of law raised. (S.G. CHAPALGAONKAR, J.)( SMT. VIBHA KANKANWADI, J. )agd