AI Drafter 
TaxTMI 
TaxTMI 
2023 (11) TMI 105
X X X X Extracts X X X X
X X X X Extracts X X X X
....l appearing for the Revenue would submit as under: 3.1 That, the service tax was introduced by way of Finance Act, 1994. At the relevant point of time, only those services that were found in section 65(105) of the Finance Act, 1994 was considered taxable. More popularly known as Positive List. The List of taxable services increased from 3 to 117 till year 2011. Many disputes arose about the taxability of a particular activity and also its classification in a particular taxable head. To get over the difficulties in defining service, a new concept of negative list services was introduced w.e.f from 1/7/2012. 3.2 That, Section 66D of Finance Act, 1994 specifies the Negative list of services i.e the Services on which Service Tax is not leviable, pursuant to which a Mega Exemption Notification 25/2012 mentions the list of service is exempt from service tax. It is submitted that Negative list basically means that all services, excluding those specified in negative list of service will be subject to service tax. Thus, one only had to see whether the service a person is providing is in the negative list or not. 3.3 That, if not, such person/entity is liable to pay service tax. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rationale behind same is to maintain uniformity in the rate of duty as well as classification of the items across the country. 3.9 However, for the purposes of the Service Tax Act, same rationale is not applicable as the rate of duty is uniform and further there is no classification of services. The only classification of service is whether they fall under the negative list or not. In the present case there is no question concerning determination of any question having a relation to the rate of duty or to the value of goods. Rate of duty is fixed, there is also no dispute as to the value. 3.10 The judgements cited by the respondents in the support of their case, pertain to the demand of service during the Positive list regime. Hence, it is submitted that same may be distinguished on the aforesaid reasoning. 4. In Tax Appeal No. 129 of 2023, this court considering the same questions of law held as under: "13. Therefore, reading the question of law framed indicates that the issue under consideration is as to whether the assessee was eligible for exception / exemption under Notification No. 25 of 2012. The exemption if denied, would require adjudication on rate of du....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of opinions between the different High Courts on matters which relate to issues having national impact in the fiscal scenario. We see abundant substance and support for this view in the manner in which the provisions of Section 35G relating to exclusion of jurisdiction of the High Court need to be understood. Section 35G(1) provides, among other things, that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal (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 purpose of assessment). The precedents noted above are rendered dilating on the concept of the term 'rate'. The question whether any particular transaction or goods is excisable is an issue directly linked to the question as to what would be the rate of duty of excise. If it is not liable for levy of excise duty, then it would be a case of 0% or 'nil'. The question of coverage is, thus, a matter intrinsically linked with the determination of questions having a relation to the rate of duty of excise. Not only that, the phrase "any question having a relation to the ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ltd. (supra), the Supreme Court held that when a Revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy in a particular forum, in a particular way, it must be sought in that forum in that manner and all other forums and modes of seeking remedy are excluded. It was further held that the excise law is a complete code in order to seek redress in excise matters and hence, it may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution of India. In the facts of the said case, the question before the Tribunal was regarding determination of the assessable value of the commodity in question for the purpose of levy of duty under the Act, which according to the Supreme Court, ought to have been carried by the assessee by way of appeal before it under Section 35L of the Central Excise Act, 1944. 15. In Commissioner of S.T., Bangalore v. Scott Wilson Kirkpatrick (I) Pvt. Ltd. (supra), the Karnataka High Court has, after discussing various decisions on the controversy in issue at length, held thus : "Determination of rate of duty in relation to any Service include determination of a question w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at an order passed by the Appellate Tribunal relating to the determination of any question having relation to the rate of Service Taxes or to the value of service for the purposes of assessment lies to the Supreme Court under Section 35L(b) of the Act and not to the High Court under Section 35G of the Act. The Court further observed as follows : "38. The intention behind this bifurcation of jurisdiction between the Apex Court and the High Court seems to be that more often than not, any decision on these aforesaid aspects not only affects the interest of the parties rendering services who are parties to a dispute, but also to the parties rendering those services throughout the country. In a country governed by Parliamentary legislation because of the territorial bifurcation in forming States and because of the divergent opinion which is possible, the Service Tax payable would vary from place to place. In order to bring uniformity in the levy of Service Tax throughout the country and consequently to see that the country's finance is not affected, the Parliament has vested the jurisdiction to decide the disputes with the Apex Court. Therefore, we see a policy underli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m every order passed in appeal by the Appellate Tribunal on or after the 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) xxx (3) xxx (4) xxx (5) xxx" "35L. Appeal to the Supreme Court. - 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Tribunal established under Section 3 of the Customs and Excise Revenues Appellate Tribunal Act, 1986 (62 of 1986) for the determination of such points arising out of the decision or order as may be specified by the Committee of Chief Commissioners of Central Excise in its order. (2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct (such authority or any Central Excise Officer subordinate to him) to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order. (3) xxxxx. (4) xxxxxx. (5) The provisions of this section shall not apply to any decision or order in which 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 of any duty is in issue or is one of the poi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the Central Government or the Board, as the case may be, granting total or partial exemption from duty; or whether the value of any goods for the purposes of assessment of duty of excise shall be enhanced or reduced. Insofar as the applicability of Service Tax is concerned, the rate of determination of duty in terms of the above provisions can be stated to be relating to the rate of Service Tax for the time being in force relating to the value of any service for the purpose of assessment of Service Tax; whether the activity is a service within the meaning of such expression as defined under the Finance Act, 1994; or whether the rate of Service Tax in respect of any service is nil or whether any service falls under the category of taxable service under sub-section (105) of Section 65 of the Finance Act, 1994; or whether any service is or is not covered by a particular notification or order issued by the Central Government or the Board, as the case may be, granting total or partial exemption from payment of Service Tax; or whether the value of the service for the purposes of assessment of Service Tax shall be enhanced or reduced by the addition or reduction of the amounts in respe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 448] it was held as under :- "In the normal sense "to assess" means "to fix 'the amount of tax due or to determine such amount". The process of re-assessment is to the same purpose and would thus be included in the connotation of the term "assessment." "The words levy, assessment and collection as we understand them include all the processes by which the tax is ascertained, demanded and realised and "re-assessment" being one of those process comes within the ambit of the phraseology employed." It will be observed that section 34 of the Income- tax Act contemplates four different cases in which the power to assess escaped income has been given. Where there has been no assessment at all, the term "assessment" would be appropriate and where there was an assessment at too low a rate or with unjustified exemptions, the term "re-assessment" would be appropriate. It was thus necessary to resort to the use of two different terms to cover with clarity the different cases dealt with in that section. This does not mean that the terms should be treated as mutually exclusive. In interpreting the term "assessment" as used in Section 7 of the Taxation Laws Act it should be give....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions 29, 31, 33 and 35 deal with the issue of demand notices and the filing of appeals and for reviewing assessment and section 34 deals with assessment of incomes which have escaped assessment. The expression "assessment" used in these sections is not used merely in the sense of computation of income and there is in our judgment no ground for holding that when by section 44, it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under section 23 and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof. Nor has the expression, "all the provisions of Chapter IV shall so far as may be apply to such assessment" a restricted content: in terms it says that all the provisions of Chapter IV shall apply so far as may be to assessment of firms which have discontinued their business. Determination - Meaning : 19. Similarly the meaning of the word "determination" also has to be kept in mind. In Jaswant Sugar Mills Ltd. Meerut v. Lakshmi Chand and others, report....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e value of goods for the purposes of assessment of any duty in cases where the assessment is made on or after the 28th day of February. 1986, or (c) whether any goods are excisable goods or whether the rate of duty of excise on any goods is nil; or (d) whether any goods fall under a particular heading or sub-heading of the Schedule to the Central Excise Tariff Act 1985, or the Additional Duties of Excise (Goods of Special Importance) Act, 1957 or the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, or that any goods are or not covered by a particular notification or order issued by the Central Government or the Board, as the case may be, granting total or partial exemption from duty; or (e) whether the value of any goods for the purposes of assessment of duty of excise shall be enhanced or reduced by the addition or reduction of the amounts in respect of such matters as are specifically provided in this Act" A perusal of the explanation makes it clear that determination of the "rate of duty" means whether any Service are excisable goods and whether the rate of duty of excise on any Service is nil, whether the said service ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e rebate of tax and the reduction of such rebate are essentially matters of measure or standards of rate." 22. A Division Bench of the Andhra Pradesh High Court in the case of Crane Betel Nut Powder Works v. Commissioner reported in 2006 (5) ALD (NOC104) held that the determination of the rate of duty in relation to any goods includes determination of a question whether any goods are excisable or not. Again, a Division Bench of the Andhra Pradesh High Court in the case of Commissioner of C.Ex., Hyderabad-IV v. Sriram Refrigeration Industries reported in 2009 (240) E.L.T. 201 (A.P.) held that the question whether the process if any undertaken in the service centre of the respondent amounts to manufacture of starters by the respondent or not, and if the goods produced during that process are excisable goods or not would fall within the meaning of the expression 'determination of the rate of duty of excise or the value of the goods for the purposes of assessment of duty' used in Section 35G(1) and Section 35L(b) of the Act. 23. Following the said judgment a Division Bench of the Delhi High Court in the case of Commissioner of Service Tax v. Delhi Gymkhana Club render....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The assessment had been completed in the present case and the assessment orders had already been passed. It is only when the goods were returned, the question of refund arose. We are therefore, unable to accept the contention Sri. Ravinder Narain that the appeals are maintainable under clause (B) of the Section 35L of the Act and the appeals are liable to be dismissed" 26. The Division Bench of this Court in the case of Premier Irrigation Equipment Ltd. v. UOI reported in 1998 (100) E.L.T. 29 (Kar.) interpreting Section 35L of the Act held as under :- "From the reading of the above provisions contained in Section 35L of the Act, it seems clear to us that even if one of the questions raised before the Tribunal for determination relate to a rate of duty of excise or to the value of goods for the purposes of assessment, then the remedy by way of appeal against the order of the Tribunal can be only before the Supreme Court and such question cannot be subjected to the Advisory jurisdiction of the High Court. Keeping in view the specific bar contained in Section 35G of the Act which specifically provides that on the said questions pertaining to rate of duty and value ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 purpose of assessment' and the Explanation thereto provides a definition of it for the purposes of this sub-section'. The Explanation says that the expression includes the determination of a question relating to the rate of duty, to the value of goods for the 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 the 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 said definition of the said expression to sub-section (5) of Section 129D, it is proper that the 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 relating to the rate of duty and to the value of goods for purposes of assessment are questions that squarely fall within the meaning of the said expressio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 130E of the Act. 30. In the case of Commissioner of Customs, New Delhi v. Punjab Stainless Steel Industries, reported in 2001 (132) E.L.T. 10 (S.C.), the allegation against the assessee was that the goods exported under the export obligation were mis-declared. In as much as he used the material of inferior grade to the one required in the manufacture of utensils. The said charge was held to be proved on the basis of the report of the expert and therefore the goods were confiscated. The said order was challenged by the assessee before the Tribunal. The Tribunal set aside the said order. Aggrieved by the same, the revenue directly preferred an appeal under Section 130E of the Act before the Supreme Court and the Supreme Court set aside the order of the Tribunal and restored die order of the Commissioner of Customs. 31. In the case of Jindal Dye Intermediate Limited v. Collector of Customs, Mumbai reported in 2006 (197) E.L.T. 471 (S.C.), the Tribunal had upheld the order of the authorities and denied the exemptions. The assessee preferred an appeal under Section 130E of the Act to the Supreme Court. The Supreme Court set aside the order of the Tribunal and held t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... question involved as stated earlier, was whether fish includes Molluscs and Crustaceans and as such the Crustaceans would otherwise mean and include Prawns/shrimps and hence Prawns and Shrimps should be regarded as a fish for the purpose of assessment and such meaning should be given to the expression "fish" incorporated as Item No. 7 to the Schedule to the Act. 34. In the case of Commissioner of Customs, New Delhi v. Sony India Limited, reported in 2008 (231) E.L.T. 385 (S.C.), the question involved was whether the assessee had committed breach of Exim Policy. Ultimately, the Tribunal held that there is no breach of Exim Policy and consequently, no duty was paid. The revenue aggrieved by the said judgment preferred an appeal to the Supreme Court under Section 130E of the Act. The Supreme Court upheld the order of the Tribunal. Conclusion 35. Therefore, the expression 'rate' is often used in the sense of a standard or measure. 'Rate' generally is an impost, usually for current or recurrent expenditure, spread over a district or other local area and is distinct from an amount payable for work done upon or in respect of particular premises. 'Rate' is defin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessment of duty' used in Section 35G(1) and Section 35L(b) of the Act. Therefore, the phrase 'rate of tax' does not mean fraction of tax payable because what is the tax payable i.e., fraction payable is decided by the legislature. Once that is prescribed by the legislature in the Act, the Court cannot sit in judgment and alter or modify the said rate of tax. The Court has no jurisdiction to go into the correctness or otherwise of the rate of tax payable in the sense the rate prescribed by the legislature. In the case of Finance Act 1994, the rate of service tax payable is uniform to all the services. If rate of tax is to be understood in the sense it is suggested, section 35G and 35L, has no application at all to the Finance Act. Such an interpretation would render Section 83 in so far as applying the provisions of Section 35G and 35L redundant. Then there is no provision in the Finance Act, 1994 for determination of the aforesaid disputes. That was not the intendment of the Parliament. Therefore, the argument that the rate of tax means only the rate at which tax is payable or a fraction is unsustainable. 36. Broadly the following disputes do not fall within the jurisdi....