Orissa High Court
Commissioner Of Gst & Central vs K.D. Sharma Proprietor on 10 January, 2023
IN THE HIGH COURT OF ORISSA AT CUTTACK
OTAPL No. 3 of 2018
Commissioner of GST & Central .... Appellant
Excise, Rourkela Commissionerate
Mr. Choudhury Satyajit Mishra, Senior Standing Counsel
-versus-
K.D. Sharma Proprietor .... Respondent
Mr. Kartik Kurmy, Advocate
CORAM:
THE CHIEF JUSTICE
JUSTICE M.S. RAMAN
ORDER
10.01.2023
Order No.
14. 1. The present appeal by the Department arises from an order dated
14th July, 2017 passed by the Customs, Excise & Service Tax
Appellate Tribunal (CESTAT), Eastern Zone, Kolkata disposing of
the Assessee's Service Tax Appeal No.ST/133/2008-DB and
thereby setting aside the order dated 30th March, 2007 passed by the
Commissioner of Central Excise, Customs & Service Tax.
2. The background facts are that the Respondent-Assessee is a
Raising & Transporting Contractor engaged in carrying out mining
activities like raising, shifting, loading and unloading and loading
into Railway wagons of Iron Ore at Kalta Iron Ore Mines, Raw
Material Division of Steel Authority of India at Kalta, Sundargarh,
Orissa in terms of a work agreement entered into between the
Assessee and the SAIL since August 2002.
3. On the basis that the Assessee was rendering 'Cargo Handling
Service' under Clause-23 of Section 65 of the Finance Act, 1994, a
Show-Cause Notice (SCN) was issued on 3rd August, 2004 seeking
to raise the demand of service tax on the basis that the Assessee had
been rendering 'Cargo Handling Services'. Against the adjudication
order of the Commissioner of Central Excise dated 30th March,
2007, an appeal was filed by the Assessee before the CESTAT. The
Tribunal agreed with the Assessee that the work carried out by the
Assessee is essentially one of mining and, therefore, it was only
with effect from 1st June, 2007 a specific entry for tax on mining
services was introduced in the Finance Act. On that basis, it was
held that the impugned demand was unsustainable in law and the
adjudication order was set aside.
4. A preliminary objection has been raised by Mr. Kartik Kurmy,
learned counsel appearing for the Respondent-Assessee that since
the tax effect of the present appeal is below the monetary limit of
Rs. 1Crore, the present appeal is not maintainable.
5. Mr. Choudhury Satyajit Mishra, learned Senior Standing Counsel
for the Department, on the other hand, submitted that if the penalty
amount is included then the monetary limit would be above
Rs.1Crore. Secondly, he submitted that in terms of Para-4 of the
instruction dated 22nd August, 2019 of the Central Board of Indirect
Taxes & Customs (CBITC) since the appeal involves a substantial
question of law as described in Para-1.3 of the earlier instruction
dated 17th August, 2011, the present appeal is maintainable. In
support of his contention regarding substantial question of law, he
referred to an order passed by this Court on 4th May, 2016 referring
the issue on classification of the services, i.e., whether as mining
services or Cargo Handling Services to the larger Bench of the
CESTAT.
6. Mr. Kurmy, learned counsel appearing for the Respondent-
Assessee pointed out that the said order of this Court was
subsequently recalled and, therefore, the matter was no longer
before the larger Bench of the CESTAT.
7. Mr. Kurmy has also drawn attention of the Court to Para-2 of the
Circular dated 17th August, 2011 which according to him clarifies
that the expression "Monetary limit" would essentially refer to the
excise duty involved and would not include the penalty or interest
amount. Since the basic duty involved is below Rs.1Crore, the
appeal is certainly below the monetary limit.
8. Further, whether the service carried out by the Appellant is Cargo
Handling Services or mining service is essentially a classification
dispute. Consequently, following the Judgment of the Karnataka
High Court in Commissioner of S.T. Bangalore v. Scott Wilson
Kirkpatrick (I) Pvt. Ltd. 2011 (23) STR 321 (Kar), the Court holds
that the appeal against the order of the CESTAT would lie if at all
only to the Supreme Court of India.
9. For all of the aforementioned reasons, the Court declines to
interfere in the present appeal, leaving it open to the Department if
it so chooses to avail any other remedy available to it in accordance
with law. The appeal is disposed of.
(Dr. S. Muralidhar)
Chief Justice
(M.S. Raman)
Judge
S. Behera
