Karnataka High Court

Cce And Cst Bengalore Service Tax 1 vs M/S. Gmr Project Pvt Ltd on 2 December, 2021

Bench: S.Sujatha, Hanchate Sanjeevkumar

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 2ND DAY OF DECEMBER, 2021

                         PRESENT

           THE HON'BLE MRS.JUSTICE S.SUJATHA

                           AND

THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR

                    C.E.A.No.13/2021

BETWEEN :

C.C.E. & C.S.T.-BENGALORE SERVICE TAX 1
1ST TO 5TH FLOOR, TTMC BUILDING,
ABOVE BMTC BUS STAND, DUMLUR
BENGALURU-560071
REP BY COMMISSIONER OF CENTRAL TAX,
BANGALORE SOUTH COMMISSIONERATE,
P.O.BOX NO.5400, C.R.BUILDING,
QUEENS ROAD, BANGALORE-560001                  ...APPELLANT

               (BY SRI AMIT DESHPANDE, ADV.)

AND :

M/s GMR PROJECT PVT. LTD.,
IBC KNOWLEDGE PARK,
PHASE-2, 'D' BLOCK, 4TH FLOOR,
BANNERGHATTA ROAD,
BANGALORE-560029
REP BY ITS DEPUTY MANAGING DIRECTOR
GMR GROUP.                                    ...RESPONDENT

               (BY SRI RAVI RAGHAVAN, ADV.)

        THIS C.E.A. IS FILED UNDER SECTION 35G OF THE
CENTRAL EXCISE ACT, 1944 ARISING OUT OF ORDER DATED
17.06.2020 PASSED IN FINAL ORDER No.A/20362/2020 BY THE
                                -2-



CESTAT,    VIDE   ANNEXURE-A         PRAYING   TO     a)    DECIDE
SUBSTANTIAL QUESTION OF LAW FORMULATED AT PARA 11
OF THE APPEAL MEMO. b) SET ASIDE THE FINAL ORDER
No.A/20362/2020 DATED 17.06.2020 PASSED BY TH CUSTOMS,
EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH
ZONAL BENCH, BENGALURU.

     THIS APPEAL COMING ON FOR ADMISSION, THIS DAY,
S. SUJATHA, J., DELIVERED THE FOLLOWING:


                      JUDGMENT

This appeal is filed by the Revenue under Section

35G of the Central Excise Act, 1944 ('Act' for short)

challenging the Final Order No.A/20362/2020 dated

17.06.2020 passed by the Customs, Excise and Services

Tax Appellate Tribunal, South Zonal Bench, Bengaluru

('CESTAT' for short) raising the following substantial

questions of law:-

1) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that Toll Plaza, Lay-bys, Pedestrian/Cattle Crossing, Highway traffic management Systems, Administrative, operation and

maintenance of Base camp, Highway lighting, landscaping road furniture and facility road side, as part of the road construction having no separate existence and are meant only for the purpose of road, hence the same is not liable to service tax?

2) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the extended period of limitation is not invocable?

3) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the classification of service for the period from 1.6.2007 to be classifiable under the 'works contract service' defined under Section 65(105)(zzzza) of the Act, and not classifiable as 'construction service' under Section 65(105)(zzq)?

4) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside all the penalties?

2. The respondent - M/s GMR Project Private

Limited, holder of service tax registration certificate is

providing services under the category of construction

services (Commercial or Industrial Buildings or Civil

Structure), Consulting Engineering Services,

Sponsorship Services, Manpower Recruitment or Supply

Agency Services, and works contract services. The

department having considered that the said services

provided by the assessee would come under the

category of 'works contract service' which attracts

service tax issued the notice demanding service tax. On

adjudication of the matter, the order-in-original was

passed confirming the demands made. Being aggrieved

by the said order-in-original, the respondent - assessee

preferred an appeal before the CESTAT in Service Tax

Appeal No.ST/25673/2013. On hearing, CESTAT has

set aside the order-in-original. Consequently, the service

tax demand has been set aside along with interest and

penalties. Being aggrieved by the said order of the

CESTAT, the Revenue has preferred this appeal.

3. Learned counsel for the respondent -

assessee has raised a preliminary objection regarding

the maintainability of the appeal under Section 35G of

the Act. Learned counsel placed reliance on the

following judgments:-

1) Commissioner of Central Excise, Mangalore vs. Mangalore Refineries and Petrochemicals Ltd., [2011 (270) ELT 49 (Kar.)];

2) Commissioner of Customs, Bangalore - 1 vs. M/s Motorola India Ltd., [2019 (368) ELT 3 (SC)];

3) Commissioner of Central Excise, vs. M/s Such Silk International Ltd., [2021-TIOL- 2102-HC-KAR-CUS].

4. In reply to the said preliminary objection,

learned counsel for the appellant - Revenue made an

endeavor to contend that the appeal is maintainable

before this Court since in Central Excise Appeal

No.15/2021, only one substantial question of law

relating to the very same assessee has been framed

inasmuch as the finding of the Tribunal whether the

construction of multi-level car parking adjacent to

Airport forms part of the Airport, hence, the same is not

liable to service tax. As such, the matter requires to be

adjudicated before this Court under Section 35G of the

Act.

5. In M/s Motorola India Ltd., supra, the

Hon'ble Apex Court has categorically held that, whether

the terms and conditions of the Notification have been

complied with by the assessee or not, whether the levy

of duty, interest and penalty were legal or not and

whether the CESTAT was justified in setting aside the

levy of duty, interest and penalty would relate to

determination of rate of duty payable and therefore, the

said issue has to be decided by the Hon'ble Apex Court

in an appeal to be preferred under Section 130E of the

Customs Act, 1962 and not by the High Court in an

appeal preferred under Section 130 of the Customs Act,

1962. The relevant paragraph of the said judgment is

quoted hereunder:-

"15. This Court in the case of Steel Authority (supra), after considering the earlier judgments of this Court, carved out certain conditions which are required to be satisfied before admitting an appeal under Section 130E of the Customs Act. It will be apposite to refer to paragraphs 21 and 22 of the said judgment. Paragraphs 21 and 22 read thus:

"21. On the basis of the discussion that has preceded, it must therefore be held that before admitting an appeal under Section 130- E(b) of the Customs Act, the following conditions must be satisfied:

                  (i)     The question raised or arising
                          must     have     a     direct    and/or
                          proximate nexus to the question

of determination of the applicable rate of duty or to the determination of the value of the goods for the assessment of duty. This is a sine qua non for the admission pf the appeal before

this Court under Section 130-E(b) of the Act.

(ii) The question raised must involve a substantial question of law which has not been answered or, on which, there is a conflict of decisions necessitating a resolution.

(iii) If the Tribunal, on consideration of the material and relevant facts, and arrived at a conclusion which is a possible conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter.

      (iv)    The Tribunal had acted in gross
              violation     of        the   procedure     or
              principles         of     natural       justice

occasioning a failure of justice.

22. The above parameters, which by no means should be considered to be exhaustive, may now be applied to the case of the parties before us to decide the primary question indicated at the outset of the present order, namely, whether this appeal deserves to be admitted."

16. We are of the considered view that the Legislature has carved out only following categories of cases to which it has intended to give a special treatment of providing an appeal directly to this Court.

"(i) determination of a question relating to a rate of duty;

(ii) determination of a question relating to the valuation of goods for the purpose of assessment;

(iii) determination of a question relating to the classification of goods under the Tariff and whether or not they are covered by an exemption notification;

(iv) 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."

17. Reverting to the present case, it would clearly be seen that the only question that is involved is whether the assessee had violated the conditions of the exemption notification by not utilizing the imported materials for manufacturing of the declared final product and was, therefore, liable for payment of duty, interest and penalty. Neither any question with regard to determination of rate of duty arises

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not a question relating to valuation of goods for the purposes of assessment arises in the present case. The appeals also do not involve determination of any question relating to the classification of goods, nor do they involve the question as to whether they are covered by the exemption notification or not. Undisputedly, the goods are covered by the said notification. The only question is as to whether the assessee has breached the conditions which are imposed by the notification for getting exemption from payment of the customs duty or not. The appeals do not involve any question of law of general public importance which would be applicable to a class or category of assessees as a whole. The question is purely inter-se between the parties and is required to be adjudicated upon the facts available."

6. In M/s Such Silk International Ltd.,

supra, the Co-ordinate Bench of this Court (where one

of us, the Hon'ble SSJ was a member) having

considered this ruling of the Hon'ble Apex Court as well

as the other judgments holding the field held that the

subject matter of the appeal which certainly goes

beyond the inter-se dispute between the parties and

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would partake the character of general public

importance as enunciated by the Hon'ble Apex Court in

M/s Motorola India Ltd., supra, would not be

maintainable before the High Court in an appeal under