Telangana High Court
The Commissioner Of Central Tax vs M/S. Vanenburg It Park Solutions ... on 10 July, 2024
THE HONOURABLE SRI JUSTICE SUJOY PAUL
AND
THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO
CENTRAL EXCISE APPEAL NO.4 OF 2023
JUDGMENT:
(per Hon'ble Sri Justice Sujoy Paul)
Sri Dominic Fernandes, learned Senior Standing Counsel
for CBIC appears for the appellant and Sri Prakash Shah,
learned counsel representing Sri Shiva Karthikeya, learned
counsel appears for the respondent.
2. Heard on admission.
3. This appeal takes an exception to the order of the
Customs, Excise and Service Tax Appellate Tribunal
(for short 'the CESTAT'), dated 08.07.2022. The assessment
order was passed against the present appellant based on the
Board's Circular No.98/1/2008-Service Tax, dated 04.01.2008,
issued vide F.No.345/6/2007-TRU. Learned counsel for the
appellant submits that various High Courts have taken a
different view, but, in none of the judgments, the aforesaid
circular was discussed or set aside. Thus, the appeal contains
substantial questions of law, which can be entertained.
4. During the course of hearing, learned counsel for the
other side placed reliance on the following judgments:-
i) Commr. of C. Ex. Visakhapatnam-II v. Sai Sahmita Storages
(P) Ltd.1
ii) Commr. of C. Ex., C. Ex., C. and S. T., Raipur v. Vimla
Infrastructure India Pvt. Ltd. 2
iii) Commr. of Gst & C. Ex. Chennai v. Dymos India Automotive
Pvt. Ltd. 3
iv) Commr. of C. Ex., Delhi-III v. Bellsonica Auto Components
India P. Ltd., 4
v) Commissioner of Central GST, Gurgaon v. DLF Ltd., 5
vi) Navaratna S.G. Highway Prop. Pvt. Ltd. v. Commr. of S.T.,
Ahmedabad.6
vii) Regency Park Property Management Services P. Ltd. v.
Commr. of S.T.,Delhi. 7
viii) Bharati Realty Ltd. v. Commissioner of Service Tax, Delhi -
II. 8
ix) Commr. of Central Tax & C. Ex., Mumbai v. Axis Bank
Ltd., 9
x) RMZ Infotech Pvt. Ltd. v. Commr. of Central Tax, Bengaluru
East. 10
xi) Honda Motorcycle & Scooter (I) Pvt. Ltd. v. Commr. of C.
Ex., Delhi-III. 11
xii) Galaxy Mercantiles Ltd. vs Commr. of Cus., Excise &
Service Tax. 12
xiii) Bharti Airtel Ltd. v. Commissioner of Central Excise, Pune-
III. 13
xiv) Vodafone Mobile Services Limited v. Commissioner of S.T.,
Delhi. 14
2011 (270) E.L.T. 33 (A.P.)
2 2018 (13) G.S.T.L. 57 (Chhattisgarh)
3 2019 (365) E.L.T. 26 (Mad.)
4 2015 (40) STR 41 (P&H)
5 2023 (70) G.S.T.L. 237 (P & H)
6 2012 (28) S.T.R. 166 (Tri. - Ahmd.)
7 Delhi, 2020 (41) G.S.T.L. 372 (Tri. - Del.)
8 2022 (65) G.S.T.L. 234 (Tri. - Del.)
9 2019 (369) E.L.T. 583 (Bom.)
10 2022 (64) G.S.T.L. 599 (Tri. - Bang.)
11 2016 (45) S.T.R. 397 (Tri. - Chan.)
12 2014 (33) S.T.R. 3 (All.)
13 2014 (35) S.T.R. 865 (Bom.)
2019 (27) G.S.T.L. 481 (Del.)
5. In addition to the aforesaid, it is submitted that the
CESTAT, Bangalore in Golflinks Software Park Pvt Ltd v. C.C.E &
C.S.T.-Bangalore 15, considered the aforesaid aspect as well as
the Circular, dated 04.01.2008. It was further submitted that
the said order of the CESTAT, Bangalore, was unsuccessfully
challenged before the Karnataka High Court in Commissioner of
Service Tax v. M/s. Golflinks Software Park Pvt Ltd 16. Lastly, it is
submitted that in view of the Constitution Bench judgment of
Hon'ble Supreme Court in Commissioner of C.Ex., Bolpur v.
Ratan Melting & Wire Industries 17, the executive instruction
cannot be enforced and therefore, there exists no substantial
question of law.
6. We have heard the parties at length.
7. The CESTAT, Bangalore in Golflinks Software's case
(15 supra) recorded as under:-
"8. Further, we find that the respondent has heavily
relied upon the Circular dated 04.01.2008 which is contrary
to the law cited supra. The Tribunal's decision eclipse this
Circular which has been held to be contrary to statute law.
The proceedings before the Commissioner are vitiated and
have been hit by administrative consideration. The Apex
Court in the case of Orient Paper Mills Ltd. Vs. UOI, 1978 (2)
ELT J 345 (SC) held that Appellate Authority which exercised
quasi-judicial power should not be influenced by
2018(8) TMI 331 - CESTAT BANGALORE
2022(12)TMI-472
2008 (231) E.L.T. 22 (S.C.)
departmental clarifications and Board Tariff Ruling while
adjudicating the cases.
9. In view of the discussion above, we are of the
considered opinion that the issue is squarely covered in
favour of the appellant by various decisions relied upon cited
supra and by following ratios of the said decisions, we set
aside the impugned order by allowing the appeal of the
appellant with consequential relief, if any."
8. However, an appeal was preferred before the Karnataka
High Court and the High Court framed the following substantial
question of law:-
"Whether the finding recorded by the CESTAT that the
respondent is eligible to take Cenvat credit on inputs/ inputs
services used for construction of immovable property and utilize
the same to discharge the service tax liability on output services
namely, renting of immovable property service in view of Board's
circular No.98/01/2008 ST dated 04.01.2008 issued vide
F.No.345/6/2007 TRU, is perverse?".
9. A plain reading of the question framed leaves no room for
any doubt that Board's circular became the subject matter of
the substantial question. The High Court gave its stamp of
approval to the order of authority below and the appeal was
dismissed. The Constitution Bench in the case of Commissioner
of C.Ex., Bolpur's case (17 supra), held as under:-
"Circulars and instructions issued by the Board are no doubt
binding in law on the authorities under the respective
statutes, but when the Supreme Court or the High Court
declares the law on the question arising for consideration, it
would not be appropriate for the Court to direct that the
circular should be given effect to and not the view expressed
in a decision of this Court or the High Court. So far as the
clarifications/circulars issued by the Central Government
and of the State Government are concerned they represent
merely their understanding of the statutory provisions. They
are not binding upon the court. It is for the Court to declare
what the particular provision of statute says and it is not for
the Executive. Looked at from another angle, a circular which
is contrary to the statutory provisions has really no existence
in law."
10. We agree with the view taken by the High Court of
Karnataka and other judgments on the similar point cited by
the learned counsel for the respondent. Thus, in our opinion,
there exists no substantial question of law, which needs
adjudication.
11. Accordingly, the appeal fails and hereby dismissed.
________________________
JUSTICE SUJOY PAUL
____________________________________________
JUSTICE NAMAVARAPU RAJESHWAR RAO
10.07.2024
Sa/nvl
