Gauhati High Court
C.Ex.App./8/2021 on 3 May, 2023
GAHC010076112021
IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
1. C. EXCISE APPEAL NO.4 OF 2021
Commissioner, Central Goods &
Services Tax, Guwahati, Kedar Road,
Fancy Bazar, PIN - 781001.
........Appellant
-Versus-
M/s Oil India Limited,
PO: Duliajan, District: Dibrugarh,
Assam, PIN - 786602.
........Respondent
2. C. EXCISE APPEAL NO.3 OF 2021
Commissioner, Central Goods &
Services Tax, Dibrugarh, Milan Nagar,
Lane-F, P.O.C.R. Building, Dibrugarh -
786003.
........Appellant
-Versus-
M/s Oil India Limited,
PO: Duliajan, District: Dibrugarh,
Assam, PIN - 786602.
........Respondent
3. C. EXCISE APPEAL NO.5 OF 2021
Commissioner, Central Goods &
Services Tax, Dibrugarh.
........Appellant
-Versus-
C. Ex. Appeal No.4/2021 & Batch 1|Page
M/s Oil India Limited,
PO: Duliajan, District: Dibrugarh,
Assam, PIN - 786602.
........Respondent
4. C. EXCISE APPEAL NO.7 OF 2021
Commissioner, Central Goods &
Services Tax, Dibrugarh, Milan Nagar,
Lane-F, P.O.C.R. Building, Dibrugarh -
786003.
........Appellant
-Versus-
M/s Oil India Limited,
PO: Duliajan, District: Dibrugarh,
Assam, PIN - 786602.
........Respondent
5. C. EXCISE APPEAL NO.8 OF 2021
Commissioner, Central Goods &
Services Tax, Dibrugarh, Milan Nagar,
Lane-F, P.O.C.R. Building, Dibrugarh -
786003.
........Appellant
-Versus-
M/s Oil India Limited,
PO: Duliajan, District: Dibrugarh,
Assam, PIN - 786602.
........Respondent
6. C. EXCISE APPEAL NO.9 OF 2021
Commissioner, Central Goods &
Services Tax, Dibrugarh, Milan Nagar,
Lane-F, P.O.C.R. Building, Dibrugarh -
786003.
........Appellant
C. Ex. Appeal No.4/2021 & Batch 2|P age
-Versus-
M/s Oil India Limited,
PO: Duliajan, District: Dibrugarh,
Assam, PIN - 786602.
........Respondent
7. C. EXCISE APPEAL NO.10 OF 2021
Commissioner, Central Goods &
Services Tax, Dibrugarh.
........Appellant
-Versus-
M/s Oil India Limited,
PO: Duliajan, District: Dibrugarh,
Assam, PIN - 786602.
........Respondent
-BEFORE-
HON'BLE THE CHIEF JUSTICE
HON'BLE MRS. JUSTICE MITALI THAKURIA
For the Appellant(s) : Mr. S.C. Keyal, Sr. Standing Counsel,
Central Goods & Service Tax.
For the Respondent(s) : Mr. D. Sen, Advocate.
Mr. D. Das, Advocate.
Date of Judgment & Order : 3rd May, 2023.
JUDGMENT & ORDER (ORAL)
[Sandeep Mehta, C.J.]
This bunch of Central Excise Appeals has been
preferred by the Department for assailing identical orders
passed by the Customs, Excise and Service Tax Appellate
Tribunal (CESTAT), Kolkata, whereby the Service Tax
Appeals preferred by the respondent/Oil India Limited
against the orders in original passed by the Commissioner
C. Ex. Appeal No.4/2021 & Batch 3|P age
of Central Excise & Service Tax, Dibrugarh confirming the
demand of service tax raised from the respondent by the
Adjudicating Officer vide various adjudication orders in
respect of the periods between April, 2011 to June, 2017
under the category of "Transportation of Goods through
Pipelines/Condult Services" were accepted. The CESTAT
held that the respondent assessee was a seller and not a
service provider and hence, in absence of service
provider/service recipient relationship, there could not be
any question of levy of service tax and hence, the demand
could not be sustained. Accordingly, the demand of service
tax interest and penalty raised by the Adjudicating
Authority and affirmed by the Appellate Authority was
quashed and set aside.
2. Affidavits-in-opposition have been filed on behalf
of the respondent in all these appeals, wherein a pertinent
preliminary objection is raised regarding maintainability of
these appeals by referring to the provisions contained in
Sections 35G and 35L of the Central Excise Act, 1944
(hereinafter referred to as the "1944 Act").
3. Arguments on the aspect of maintainability of
these appeals have been heard. The circumstances leading
to filing of the appeals were thoroughly analyzed. The
applicable statutory provisions, the impugned orders and
precedents cited at bar have been perused.
4. Mr. D. Sen and Mr. D. Das, learned counsel
representing the respondent vehemently and fervently
C. Ex. Appeal No.4/2021 & Batch 4|P age
contended that as the only issue involved in these appeals
is regarding determination of taxability of the goods for the
purpose of assessment of service tax, by virtue of Section
35L of the 1944 Act, the appeal from an order of the
Appellate Tribunal would lie to the Hon'ble Supreme Court
and not to the High Court. They urged that the High Court
can entertain an appeal from an order passed in appeal by
the Appellate Tribunal only upon being satisfied that the
appeal involves substantial question of law and that case
does not arise from an order relating, amongst 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 the purpose of assessment. They placed reliance
upon the following judgments in support of their
arguments:
(a) Commissioner of Central Madras High
Excise, Pondicherry -Vs- Court
CESTAT, Chennai, reported in
2016 (340) ELT 53 (Mad.)
(b) Commissioner of Service Tax, Calcutta High
Kolkata -Vs- Calcutta Industrial Court
Supply Corporation, reported in
2018 (19) GSTL 444 (Cal.)
(c) Commissioner Central Excise, Bombay High
Mumbai-V -Vs- Reliance Media Court
Works Limited, reported in 2020
(372) ELT 220 (Bom.)
It was contended that the issue regarding
maintainability of the appeal in the High Court in exactly
identical scenario has been decided against the revenue in
C. Ex. Appeal No.4/2021 & Batch 5|P age
these cases. On these submissions, learned counsel for the
respondent implored the Court to dismiss the appeals as
being not maintainable.
5. Per contra, Mr. S.C. Keyal, learned senior standing
counsel, Central Goods & Service Tax, vehemently and
fervently opposed the submissions advanced by the
learned counsel for the respondents. He urged that the
situation involved in the case at hand is not covered by the
exceptions indicated in Section 35G of the 1944 Act. The
substantial questions of law involved in these appeals do
not require determination of any issue having relation to
the rate of duty of excise or to the value of goods for the
purpose of assessment. The question, which is involved in
these matters, is as to whether or not the assessee is liable
to pay service tax on transportation of goods by pipeline
service and that such a question would not fall within the
purview of the exception created under Section 35G of the
1944 Act. He submitted that by virtue of the enabling
provisions contained in the Finance Act, the word "excise
duty" is to be read as service tax and the department has a
right to file a statutory appeal against the orders of
CESTAT. He thus, implored the Court to admit the appeals
on the following substantial question of law:-
"(a) Whether the Hon'ble CESTAT, Kolkata is correct in
holding that the assessee is not liable to pay service
tax on the 'Transportation of Goods by Pipeline Service'
for the consideration received by the assessee for
transportation of crude oil from their premises to the
buyers' premises?"
C. Ex. Appeal No.4/2021 & Batch 6|P age
6. We have given our thoughtful consideration to the
submissions advanced at Bar and have gone through the
material available on record.
7. The question regarding maintainability of these
appeals falls within a very narrow compass. The relevant
provisions of law, i.e. Sections 35G and 35L of the 1944
Act, which have a bearing on the issue are reproduced
hereinbelow for the sake of ready reference:
"35G. 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 1st day of July, 2003
(not being an order 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 the
purposes of assessment), if the High Court is satisfied
that the case involves a substantial question of law.
(2) The Commissioner of Central Excise or the other
party aggrieved by any order passed by the Appellate
Tribunal may file an appeal to the High Court and such
appeal under this sub-section shall be -
(a) filed within one hundred and eighty days from
the date on which the order appealed against is
received by the Commissioner of Central Excise or
the other party;
(b) accompanied by a fee of two hundred rupees
where such appeal is filed by the other party;
(c) in the form of a memorandum of appeal
precisely stating therein the substantial question of
law involved.
[(2A) The High Court may admit an appeal after the
expiry of the period of one hundred and eighty days
referred to in clause (a) of sub-section (2), if it is
satisfied that there was sufficient cause for not filing
the same within that period.]
C. Ex. Appeal No.4/2021 & Batch 7|P age
(3) Where the High Court is satisfied that a substantial
question of law is involved in any case, it shall
formulate that question.
(4) The appeal shall be heard only on the question so
formulated, and the respondent shall, at the hearing of
the appeal, be allowed to argue that the case does not
involve such question:
Provided that nothing in this sub-section shall be
deemed to take away abridge the power of the Court to
hear, for reasons to be recorded, the appeal on any
other substantial question of law not formulated by it,
if it is satisfied that the case involves such question.
(5) The High Court shall decide the question of law so
formulated and deliver such judgment thereon
containing the grounds on which such decision is
founded and may award such cost as it deems fit.
(6) The High Court may determine any issue which -
(a) has not been determined by the Appellate
Tribunal; or
(b) has been wrongly determined by the Appellate
Tribunal, by reason of a decision on such question
of law as is referred to in sub-section (1).
(7) When an appeal has been filed before the High
Court, it shall be heard by a bench of not less than two
Judges of the High Court, and shall be decided in
accordance with the opinion of such Judges or of the
majority, if any, of such Judges.
(8) Where there is no such majority, the Judges shall
state the point of law upon which they differ and the
case shall, then, be heard upon that point only by one
or more of the other Judges of High Court and such
point shall be decided according to the opinion of the
majority of the Judges who have heard the cases
including those who first heard it.
(9) Save as otherwise provided in this Act, the
provisions of code of Civil Procedure 1908 (5 of 1908),
relating to the appeals to the High Court shall, as far
as may be, apply in the case of appeals under this
section.
C. Ex. Appeal No.4/2021 & Batch 8|P age
35L. Appeal to Supreme Court.-- [(1)] An appeal
shall lie to the Supreme Court from--
(a) any judgment of the High Court delivered--
(i) in an appeal made under section 35G; or
(ii) on a reference made under section 35G by the
Appellate Tribunal before the 1st day of July,
2003;
(iii) on a reference made under section 35H,
in any case which, on its own motion or on an oral
application made by or on behalf of the party
aggrieved, immediately after passing of the
judgment, the High Court certifies to be a fit one for
appeal to the Supreme Court; or]
(b) any order passed [before the establishment of the
National Tax Tribunal] by the Appellate 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.
[(2) For the purposes of this Chapter, the determination
of any question having a relation to the rate of duty
shall include the determination of taxability or
excisability of goods for the purpose of assessment.]"
8. The very substantial question of law, which has
been proposed by the appellant, raises an issue about the
liability or otherwise of the assessee to pay service tax on
transportation of goods by pipeline service. Thus, the core
issue involved pertains to determination of the rate of duty
of excise (service tax) or the value of goods for the
purpose of assessment. Perusal of the language of sub-
section (2) of Section 35L of the 1944 Act brings more
clarity and virtually puts the controversy beyond the pale of
doubt that the issues posed for adjudication are falling in
the category of exceptions and, as a consequence, the
C. Ex. Appeal No.4/2021 & Batch 9|P age
High Court would not have the jurisdiction to entertain
appeal against the order of CESTAT. The provision makes it
clear that determination of "any question having a
relation to the rate of duty shall include the
determination of taxability or excisability of the goods
for the purpose of assessment". The question of law
quoted above, as has been proposed by the revenue in
these appeals, is regarding liability of the assessee to pay
service tax on transportation of oil through a pipeline and
the same clearly falls within the ambit of the restriction
created by Section 35 G(1) read with Section 35L(1) of the
1944 Act.
9. The Full Bench of Bombay High Court considered
identical issue in the case of Commissioner Central
Excise, Mumbai-V -Vs- Reliance Media Works Limited
(supra) and held as below:
"3. This reference was made because of
divergence of views between two earlier Division
Benches of this Court in respect of maintainability of
appeals before this Court from the orders of the
Tribunal deciding taxability of services and
excisability of goods in the context of section 35-G(1)
and 35-L(1) and (2) of the Act. The apparent conflict is
between the decisions of this Court in Global Vectra
Helicorp Ltd. v. C.S.T. Mumbai, CEA No. 66 of 2014,
decided on 23rd March, 2015 and Bajaj Auto Ltd. v.
Union of India, (2016) 4 STR 384, decided on 24th
June, 2015. According to the referring Division Bench,
the decision in Global Vectra Helicorp Ltd. (supra), of
this Court held that in view of sections 35-G(1) and
35-L(2) of the Act, the question of taxability or
excisability of goods for the purpose of assessment
would not be an issue of rate of duty. Therefore, an
appeal from the order of the Tribunal on the issue of
C. Ex. Appeal No.4/2021 & Batch 10 | P a g e
taxability/excisability would be maintainable before
this Court and not before the Hon'ble Supreme Court.
On the other hand, in Bajaj Auto Ltd. (supra) this
Court held that in view of section 35-G(1) and 35-
L(1)(b) of the Act, an appeal on the issue of
taxability/excisability would lie to the Hon'ble
Supreme Court and cannot be entertained by this
Court. Further, this Court in Bajaj Auto Ltd. (supra)
also held that section 35- L(2) of the Act which was
inserted into the Act w.e.f. 6th August, 2014 was only
clarificatory in nature. This as the issue of
excisability/taxability was a rate of duty issue at all
times.
4. Briefly the facts leading to this reference are
as under:--
(a) On 20th November, 2013, the Tribunal passed
the impugned order allowing the respondent's appeal.
This by holding that chemical preparations for
photographic use are not marketable, therefore, not
goods. Thus, not classifiable under chapter 37
heading 3707 of the Central Excise Tariff Act, 1985.
(b) Being aggrieved by order dated 20th November,
2013, the Revenue filed an appeal under section 35-
G(1) of the Act to this Court.
(c) At the hearing of the above appeal before the
Division Bench, the respondent assessee raised a
preliminary objection, viz. that the appeal filed by the
Revenue is not maintainable before this Court as it
deals with excisability of goods. In support, it placed
reliance upon the decision of this Court in Bajaj Auto
Ltd. (supra) which dealt with the question of
taxability, viz. whether service tax is at all liable on
payment of royalty. The Tribunal had held that the
same cannot be a matter of service and, therefore,
outside the scope of Finance Act, 1994. In an appeal
filed by the Revenue, the respondent in the appeal,
namely, Bajaj Auto Ltd., objected to the jurisdiction of
this Court to entertain an appeal under section 83 of
the Finance Act, 1994 read with section 35-G of the
Act. The Court held that the issue of taxability is a
question relating to rate of duty and, therefore, an
appeal against such an order in terms of section 35-
G(1) of the Act would lie only before the Hon'ble
C. Ex. Appeal No.4/2021 & Batch 11 | P a g e
Supreme Court. Further, the Court also noted that
insertion of sub-section (2) to section 35-L of the Act
w.e.f. 6th August, 2014 was only clarificatory in
nature. Thus, the appeal from an order of the Tribunal
relating to taxability/excisability would be appealable
before the Hon'ble Supreme Court of India even prior
to 6th August, 2014.
(d) On the other hand, the appellant Revenue
placed reliance upon the decision of this Court in
Global Vectra Helicorp Ltd. (supra) where the issue
was whether the service rendered by Global Vectra
Helicorp Ltd. could be classified under section
65(105)(zzzzj) of the Finance Act, 1994 as contended
by the Revenue and upheld by the Tribunal or not at
all under the Finance Act, 1994. The objection raised
by the Revenue to the maintainability of the appeal to
this Court was negatived. This on the ground that the
issue of rate of duty, i.e. of classification, would only
arise when the authorities have to decide the
appropriate classification between two competing
entries under the Finance Act, 1994. It held no
question relating to determination of the rate of duty
can arise when the order under challenge decides
whether the services rendered can be said to be
covered by section 65(105)(zzzzj) of the Finance Act,
1994.
(e) The Division Bench which referred the above
question to this Court, noted the fact that although
Global Vectra Helicorp Ltd. (supra) did in terms refer
to section 35-L(2) of the Act, it did not express any
view on it. Moreover, it also noted that the binding
decision of the Apex Court in Navin Chemicals Mfg.
and Trading Co. Ltd. v. Collector of Customs, (1993)
68 ELT 3 and the decision of this Court were also not
considered. Moreover, before the referring Division
Bench, the parties did not dispute that post insertion
of sub-section (2) to section 35-L of the Act, w.e.f. 6th
August, 2014, orders of the Tribunal relating to
taxability of services and excisability of goods would
be appealable to the Hon'ble Supreme Court,.
(f) It is in view of the aforesaid conflict between
the two views of this Court, as indicated in Global
Vectra Helicorp Ltd. (supra) and Bajaj Auto Ltd.
C. Ex. Appeal No.4/2021 & Batch 12 | P a g e
(supra), that the aforesaid questions have been
referred by the Division Bench to the Full Bench.
5. We have heard Mr. Bangur, for the appellant
Revenue and Mr. Sridharan, learned Senior Counsel
who appears for the appellant in Central Excise
Appeal No. 33 of 2018 where he states an identical
question would arise in an appeal filed by M/s
Shoppers Stop Ltd. Both of them support the
proposition that appeals from orders of the Tribunal in
respect of excisability/taxability will lie to this Court.
We have also heard Mr. Desai, learned Senior
Counsel, who appears for the respondent-assessee to
contend that the appeal from orders of the Tribunal in
respect of excisability/taxability will be to the Hon'ble
Supreme Court.
6. (I) *** *** ***
(II) *** *** ***
(III) (a) We have considered the rival submissions.
The appeals from the orders of the Tribunal under the
Finance Act, 1994 and the Act prior to the introduction
of sub-section (2) to section 35-L of the Act were
governed by section 35-G(1) and 35-L(1) of the Act. In
terms of section 35-G(1) of the Act, every appeal from
order of the Tribunal passed after 1st July, 2003
giving rise to a substantial question of law would be
to the High Court except orders of the Tribunal
relating to the rate of duty of excise or value of goods
for the purpose of assessment. The above orders were
excluded from the jurisdiction of the High Court and
were appealable only to the Hon'ble Supreme Court in
terms of section 35-L(1)(b) of the Act. In the context of
the above, we have to consider that when the order of
the Tribunal decides a dispute that the service is not
covered by the Finance Act or goods not being covered
by the Act for the purposes of determining the rate of
duty for the purpose of assessment, would be
appealable to this Court or not.
(b) The contention of the appellant - Revenue is that
deciding of excisability or taxability is not connected
to the rate of duty. Therefore, an order of the Tribunal
deciding excisability/taxability are appealable to the
High Court and not the Hon'ble Supreme Court. In
support reliance is placed upon the decision of the
C. Ex. Appeal No.4/2021 & Batch 13 | P a g e
Supreme Court in Motorola India Ltd. (supra), while
dealing with pari materia provisions under the
Customs Act, 1962. We note that the issue in the
above case was not with regard to excisability or
taxability or importability in the context of Customs
Act, 1962 but with regard to eligibility of an
exemption notification for non-satisfaction of post
import conditions therein. In the above case, there
was no issue relating to the rate of duty in respect of
the goods imported but the issue was application of
an exemption after importation and clearance for
home consumption, subject to satisfying the
conditions of the notification, viz. utilization of
imported material for specific purpose such as
manufacture of final product. The Supreme Court,
while holding that the above issue is not a rate of
duty issue, observed that the dispute is inter se
between the parties and the decision is not applicable
to a separate class or category of assessees as a
whole. The above decision will not apply to a decision
of the Tribunal dealing with taxability/excisability
which necessarily would require determining the rate
of duty for the purpose of assessment. It is only on
deciding the taxability of services or excisability of
goods that a rate of duty can be decided. The words
"determination of any question having a relation to
rate of duty of excise for the purpose of assessment"
as found in the context of section 35-G and 35-L of the
Act was a subject of consideration by this Court in
Sterlite Optical Technologies Ltd. v. Commissioner of
Central Excise, 213 ELT 658. This Court held that the
word "assessment" has a very comprehensive
meaning, i.e. it can comprehend the whole procedure
for ascertaining and imposing duty liability. Thus, the
words "for the purpose of assessment" would cover
even the issue of the Tribunal deciding excisability
and/or taxability as it is a part of the process of
assessment. Besides, the answer to the question
whether a product/service is excisable/taxable will
not only have an impact on a dispute between parties
inter se but would have an all India impact and,
therefore, the statute contemplates an appeal to the
Hon'ble Supreme Court for uniformity of decisions.
Otherwise, we would have a situation where different
High Courts take different views on the issue of
C. Ex. Appeal No.4/2021 & Batch 14 | P a g e
excisability/taxability, leading to a situation where in
some States the service/goods are not taxable/
excisable and taxable in other States. Thus, the
decision of the Apex Court in Motorola (India) Ltd.
(supra) has specifically referred to the fact, that the
issue before it does not have an all India impact. This
as it does not deal with issue of taxability/
excisability for the purpose of assessment.
(c) The appellant Revenue also relies upon the decision of
this Court in Greatship (India) Ltd. (supra) and of the
Supreme Court in Navin Chemicals (supra) to contend
that an appeal arising from an order dealing with
taxability/excisability would only be before this High
Court and not the Hon'ble Supreme Court. We find
that the decision in Greatship (India) Ltd. (supra) of
this Court is not applicable to the present facts, as it
itself records in paragraph 2 and 28 thereof that there
was no dispute before it that the services are taxable.
Thus, the objection of the Revenue (respondent before
it) that this Court does not have jurisdiction, was
negatived. So far as reliance upon the decision of the
Apex Court in Navin Chemicals (supra) is concerned,
we note that in paragraph 11 thereof, the Supreme
Court has observed as under:--
'11. It will be seen that sub-section (5) uses the
said expression 'determination of any question having
a relation to the rate of duty or to the value of goods
for the purposes of assessment' and the Explanation
thereto provides a definition of it for the purpose of
this sub-section'. The Explanation says that the
expression includes the determination of a question
relating to the rate of duty; to the valuation of goods
for purposes of assessment; to the classification of
goods under the Tariff and whether or not they are
covered by an exemption notification; and whether
the value of goods for purposes of assessment should
be enhanced or reduced having regard to certain
matters that the said Act provides for. Although this
Explanation expressly confines the definition of the
said expression to sub-section (5) of section 129-D, it
is proper that the said expression used in the other
parts of the said Act should be interpreted similarly.
The statutory definition accords with the meaning we
have given to the said expression above. Questions
C. Ex. Appeal No.4/2021 & Batch 15 | P a g e
relating to the rate of duty and to the value-of goods
for the purposes of assessment are questions that
squarely fall within the meaning of the said
expression. A dispute as to the classification of goods
and as to whether or not they are covered by an
exemption notification relates directly and proximately
to the rate of duty applicable thereto for purposes of
assessment. Whether the value of goods for purposes
of assessment is required to be increased or
decreased is a question that relates directly and
proximately to the value of goods for purposes of
assessment. The statutory definition of the said
expression indicates that it has to be read to limit its
application to cases where, for the purposes of
assessment, questions arise directly and proximatley
as to the rate of duty or the value of the goods.'
(emphasis supplied)
From the above, it is clear that the Apex Court noted
that the classification of goods under the Tariff for the
purpose of determining the rate of duty would be a
question having relation to the rate of duty. Thus, the
above observations by the Apex Court would support
the view that taxability/excisability is not appealable
before this Court, as decision on the above is in the
context of it being classifiable under the Finance Act,
1994 or the Act read with the Tariff.
(d) On the other hand, we note that all the decisions
relied upon by the respondent and cited hereinabove
have held that the issue of excisability, namely,
manufacture taking place or not, are all issues
relating to rate of duty. Thus, holding that an appeal
on the issue of excisability/taxability from the orders
of the Tribunal would be to the Hon'ble Supreme
Court. In fact, the Kerala High Court in Kerala State
Beverages (supra) has held that whether any goods
are excisable or not, will fall within the exclusion
provided under section 35-G(1) of the Act. It further
noted that this distinction between Hon'ble Supreme
Court and the High Court seems to be clearly
intended to avoid conflict of views between High
Courts on a question having all India impact. It is
pointed out to us that except in the decision rendered
by the Andra Pradesh High Court in Sriram
C. Ex. Appeal No.4/2021 & Batch 16 | P a g e
Refrigeration (supra), from which an appeal to the
Supreme Court has been admitted on 11th March,
2011 (362 ELT A 108), all the other decisions are
final. We find that this Court in Greatship (India) Ltd.
(supra) has observed in para 20 thereof that this
Court in Commissioner of Central Excise and Service
Tax v. Credit Suisse Services (I) Pvt. Ltd., (2015) 38
STR 473 had held the issue of the taxability of the
services and the rate at which such services would be
taxed was required to be considered by the Hon'ble
Supreme Court and not by this Court. It is noteworthy
that the Revenue has not been able to show a single
decision of any Court (including this Court) except the
decision in Global Vectra Helicorp (supra) to support
the contention that the issue of excisability/taxability
can be entertained by the High Court. We shall deal
with the above decision of this Court in Global Vectra
Helicorp (supra) separately a little later. During the
course of hearing, our attention was also drawn to
the decision of the Delhi High Court in Commissioner
of Sales Tax v. Ernst and Young Pvt. Ltd., 34 STR 3.
In the above case, the Court was concerned with the
issue whether the services rendered by the assessee
therein were chargeable to tax under the Finance Act,
1994. The assessee therein raised a preliminary
objection about the jurisdiction of the High Court to
entertain the Revenue's appeal on the above dispute.
The Delhi High Court, while following the decision of
the Hon'ble Supreme Court in Navin Chemicals
(supra), in particular para 11 thereof, held that the
orders of the Tribunal deciding the issue of taxability
would be appealable to the Supreme Court. It noted in
paragraphs 18 and 19 as follows:--
'18. On reading of the said paragraph, it is lucid and
clear that Supreme Court had stated that questions
relating to rate of duty and valuation for the purpose
of assessment as defined in the explanation to sub-
section (5) to section 129-D of the Customs Act, would
include question relating to classification of goods
under the tariff, whether or not they are covered by
exemption notification; whether value for the purpose
of assessment should be enhanced or reduced etc. It
was further observed that statutory definition accords
to the meaning given to the expression above. For the
C. Ex. Appeal No.4/2021 & Batch 17 | P a g e
purpose of present controversy, we are inclined to
ignore and not take into consideration explanation 5
to section 129-D or subsection (5) to section 35E.
However, in spite of the said position, we do not think
that the decision in the case of Delhi Gymkhana Club
Ltd. (Supra) is required to be referred to a Larger
Bench. Determination of any question relating to rate
of tax would necessarily directly and proximately
involve the question, whether activity falls within the
charging section and Service Tax is leviable on the
said activity. The said determination is integral and
an important injunct to the question of rate of tax. In
case Service Tax is not to be levied or imposed and
cannot be imposed under the charging section, no tax
would be payable. The said determination would be
direct or proximate to the issue of rate of tax, which
will include nil tax, when no tax is chargeable.
19. If the reasoning given by the Revenue is to be
accepted, it will lead to anomaly and substantial
confusion. All assessments necessarily have to
determine and decide the rate of tax after determining
and deciding whether or not activity is chargeable or
tax can be levied. Assessments against the assessee
would decide the rate of tax applicable once it is held
that the activity is chargeable to tax under the F. Act.
The words 'rate of tax' in relation to rate of tax would
include the question whether or not the activity is
exigible to tax under a particular or specific provision.
This will be a reasonable and appropriate
interpretation and will not cause or result in confusion
or ambiguity regarding the appellate forum. Line
between exigibility and rate of tax as propounded can
be rather thin and superfluous in the present
statutory context.'
(emphasis supplied)
It further records the fact that the Hon'ble Supreme
Court has been entertaining and deciding the appeals
under the Act relating to excisability of the goods and
in that regard made specific reference to the following
decisions of the Supreme Court:--
(a) Maltex (I) Pvt. Ltd. v. Commissioner of C. Ex.,
(2004) 165 ELT 129,
C. Ex. Appeal No.4/2021 & Batch 18 | P a g e
(b) Commissioner of Central Excise v. Mahavir
Aluminum, 212 ELT 3,
(c) Nestle India Ltd. v. Commissioner of Central
Excise, 235 ELT 577.
We are in complete agreement with the reasons
of the above Delhi High Court decision in Ernst and
Young Pvt. Ltd. (supra) to conclude that issues of
taxability and excisability from the orders of the
Tribunal are appealable to the Hon'ble Supreme
Court.
(e) It was also contended by the appellant Revenue
that insertion of subsection (2) to section 35-L of the
Act that taxability/excisability would be a rate of
duty issue w.e.f. 6th August, 2014 would itself imply
that prior to 6th August, 2014, the issue of
taxability/excisability was appealable to the High
Court. This submission on behalf of the Revenue
cannot be accepted in view of the various decisions
referred to hereinabove where the Courts have held
that issue of excisability of goods and taxability of
services are appelable to the Hon'ble Supreme Court
even prior to the insertion of sub-section (2) to section
35-L of the Act. The introduction/insertion of sub-
section (2) to section 35-L of the Act was done as a
matter of abundant caution so as to clarify and make
explicit what was implicit in section 35-G(1) and 35-
L(1)(b) of the Act. This was done only to ensure that
the Courts do not waste time examining the issue
again and again, when the issue has already been
decided by various Courts upon which the respondent
assessee has placed reliance. This in support of its
case that an appeal with respect to taxability/
excisability is maintainable only before the Hon'ble
Supreme Court of India even before the insertion of
sub-section (2) of section 35- L of the Act. In fact, this
view is also supported by clause 99 of Notes on
Clauses to Finance (No. 2) Bill, 2014 which introduced
sub-section (2) to section 35-L of the Act. It specifically
states that section 35-L is being amended so as to
clarify that issue of taxability/excisability is covered
by the term rate of duty. Thus, what was implict has
been made explicit. We find support for this view in
the decision of the Supreme Court in W.P.I.L. Ltd. v.
C. Ex. Appeal No.4/2021 & Batch 19 | P a g e
Commissioner of Central Excise, 181 ELT 359. We
also note that Punjab and Haryana High Court
Commissioner of S.T. v. DLF Golf Resort Ltd., (2018)
56 GSTR 247 has held that insertion of subsection (2)
to section 35-L of the Act was clarificatory. Therefore,
insertion of sub-section (2) to section 35-L of the Act
w.e.f. 6th August, 2014 would not justify the
contention of the Revenue that prior to 6th August,
2014, the appeals were maintainable before the High
Court.
(f) Therefore, in view of the above, we are of the view
that even prior to the insertion of sub-section (2) to
section 35-L of the Act, the issue of taxability and
excisability would be an issue relating to the rate
duty of excise/services for the purpose of
assessment. Therefore, the appeal from the orders of
the Tribunal deciding issue of excisability/taxability,
cannot be entertained by this Court in terms of section
35-G(1) and 35-L(1)(b) of the Act de hors section 35-
L(2) of the Act.
Thus, question No. (A) as referred, is answered as
under:--
Appeals from orders of the Tribunal relating to
taxability/excisability passed prior to 6th August,
2014 i.e. the date of insertion of sub-section (2) to
section 35-L of the Act being a rate of duty issue,
would be appealable only to the Hon'ble Supreme
Court and not the High Court."
10. Similar interpretation, as was made the by
Bombay High Court in the above judgment, has been made
by various other High Courts in the judgments relied upon
by the learned counsel for the appellant. We are in
complete agreement with the view taken by the Bombay
High Court after apposite evaluation of the statutory
provisions. Hence, we are of the firm opinion that these
appeals to the High Court against the order of the
Customs, Excise and Service Tax Appellate Tribunal
C. Ex. Appeal No.4/2021 & Batch 20 | P a g e
(CESTAT), Kolkata are clearly barred by virtue of Section
35G(1) read with Section 35L of the 1944 Act. Since the
issue involved in these appeals is regarding applicability of
service tax interest and penalty on transportation of goods
through pipelines/conduit services undertaken by the
respondent assessee, the same, if were to be challenged,
can only be resorted to by filing an appeal before the
Hon'ble Supreme Court. Resultantly, the preliminary
objection raised on behalf of the respondent regarding
maintainability of appeals is sustained.
11. The appeals are dismissed as being not
maintainable. Needless to say that the revenue shall be at
liberty to file appeals against the impugned order of the
Customs, Excise and Service Tax Appellate Tribunal
(CESTAT) before the Hon'ble Supreme Court, if so desired.
JUDGE CHIEF JUSTICE
Comparing Assistant
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