2020 (4) TMI 341 - HC - Central Excise

Tribunal Appeal Dismissed Under Section 35L of Excise Act - Taxability Issue Decisive

Commissioner of Central Excise, Delhi-III Versus Dhruv Industries Ltd.

The High Court dismissed the appeal against the Tribunal's order, determining that the case fell under Section 35L of the Central Excise Act, 1944. The ... Maintainability of appeal - appeal; to High Court - issue relates to taxability or excisability of goods - primary objection taken by the Assessee is that this case would not be covered under Section 35G of the Central Excise Act, 1944 but under Section 35L of the Act as the basic question for determination relates to taxability or excisability of goods - HELD THAT:- From Section 35L(1) (b) of the Act it is evident that the appeal shall lie to the Supreme Court on the question in relation to rate of duty of excise or value of goods. Sub-Section(2) of Section 35L of the Act clarifies that the rate of duty shall include the determination of taxability or excisability of goods. In the present case, the claim of the Assessee was that the activity carried out by it was manufacture and hence was covered under exemption notifications. The issue is for determination of the taxability. The case would be covered by Section 35L of the Act because taxability depends on whether the activity carried out by the Assessee is manufacture or not - the appeal is dismissed as not maintainable. Issues:1. Appeal against Tribunal's order on the activity undertaken by the Assessee.2. Determination of whether the case falls under Section 35G or Section 35L of the Central Excise Act, 1944.3. Interpretation of Sections 35G and 35L in relation to taxability or excisability of goods.4. Assessment of whether the activity amounts to manufacture and is covered under exemption notifications.Analysis:1. The appeal before the High Court was against the Tribunal's order regarding the nature of the activity undertaken by the Assessee, contending it amounts to manufacture.2. The primary objection raised was whether the case falls under Section 35G or Section 35L of the Central Excise Act, 1944, as the determination relates to the taxability or excisability of goods.3. Sections 35G and 35L of the Act were examined to understand the jurisdiction for appeal. Section 35L specifically addresses appeals to the Supreme Court concerning questions related to the rate of duty, including taxability or excisability of goods.4. The Court noted that the Assessee's claim was based on the activity being classified as manufacture, thus impacting its taxability under exemption notifications. The core issue revolved around whether the activity constituted manufacture.5. The judgment concluded that the case would be covered under Section 35L of the Act, as the determination of taxability hinged on whether the activity amounted to manufacture.6. Consequently, the appeal was dismissed as not maintainable, aligning with the interpretation that the case pertained to taxability, falling under Section 35L.7. With the main case dismissed, any pending application was also disposed of, bringing closure to the legal proceedings related to the matter.