AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 1523
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.... pecuniary jurisdiction. 4. This is the second occasion, when maintainability of the present appeal was raised in piecemeal. The core reason supplied for non-maintainability of present appeal is Judicial Cell Notifications/Instructions dated 22.08.2019 and 06.08.2024 as issued by the Central Board of Indirect Taxes and Customs, Ministry of Finance, Department of Revenue. 5. For better understanding of the case, the aforesaid Notifications/Instructions dated 22.08.2019 and 06.08.2024 as issued by the Central Board of Indirect Taxes and Customs, Ministry of Finance, Department of Revenue are reproduced hereinbelow:- (i) "F. No.390/Misc./116/2017-JC Ministry of Finance Department of Revenue Central Board of Indirect Taxes & Customs (Judicial Cell) ****** 'B' Wing, 4th Floor, HUDCO VISHALA Building Bhikaji Cama Place, R.K. Puram, New Delhi-66 Date-22.08.2019 INSTRUCTION To 1. All Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Customs/Customs (Preventive)/GST & CX; 2. All Principal Director Generals/Director Generals under CBIC; 3. Chief Commissioner (AR); Commissioner (Legal....
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....istry of Finance Department of Revenue Central Board of Indirect Taxes & Customs (Judicial Cell) ****** 'B' Wing, 4th Floor, HUDCO VISHALA Building Bhikaji Cama Place, R.K. Puram, New Delhi-66 Date-06.08.2024 Subject: Reduction of Government Litigation-Raising of monetary limits for filing appeals by the Department before CESTAT/High Courts and Supreme Court in Legacy Central Excise and Service Tax- reg. In exercise of the powers conferred by Section 35R of the Central Excise Act, 1944 made applicable to Service Tax vide Section 83 of the Finance Act, 1994, and in partial modification of the Board instructions issued from F. No.390/Misc./163/2010-JC dated 17.08.2011, the Central Board of Indirect Taxes and Customs hereby fixes the following monetary limits below which appeal shall not be filed in the CESTAT, High Court and Supreme Court: S. No. Appellate Forum Monetary Limit 1. CESTAT Rs. 60 lakhs 2. High Courts Rs. 2 Crore 3. Supreme Court Rs. 5 Crore 2. This instruction applies only to legacy issues i.e. matters relating to Central Excise and Service Tax, and will apply to pending cases as well. ....
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....ed with constitutional validity of the provisions of an Act or Rule, where Notifications/ Instructions/ Order / Circular, which has been held illegal or ultra vires or classification and refund issues, which are of legal and/or recurring nature may be entertained irrespective of the amount involved as mentioned aforesaid. 7. Contrary to the aforesaid submission, it is pointed out by Dr. K.N. Singh, learned ASG duly assisted by Mr. Manish Kumar, learned counsel appearing for appellant that the present memo of appeal is maintainable for the reason that the substantial questions of law is involved in this case as "Whether terminal facility/ware-housing is a distinct service liable to Service Tax under the provisions of the Act and Rules" and, therefore the present appeal is maintainable. It is also pointed out that the ground of pecuniary jurisdiction was not raised by respondent through its first counter affidavit dated 31.08.2021 and by that time entire focus was on its maintainability in view of Section 35G of the Central Excise Act, 1944, which is already decided by this Court vide order dated 18.03.2026 and subsequently, by separate counter affidavit dated 22.04.2026, present ....
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.... monetary limits as discussed aforesaid in terms of Notification dated 22.08.2019 & 06.08.2024. 10. Admittedly, the present appeal has been filed for evading the payment of service tax of Rs.58,00,063/- (including Cess) for the period from July 2003 to March 2007 and Rs. 23,47,782/- (including Cess) for the period from April, 2007 to March, 2008 for which two separate appeals i.e. Appeal Nos.31 of 2009 and 285 of 2009 were filed, which was decided through common impugned order. Therefore, the total tax evaded is Rs.81,47,845/-, and is less than 1 Crore, which is not a permissible limit for adjudication in terms of Notifications dated 22.08.2019 and 06.08.2024 before this Court and on this score the argument of Mr. Pathy appears convincing, which was also not disputed by appellant. 11. Therefore, we have to examine second aspects in terms of aforesaid notifications, whether the dispute involves any "substantial questions of law or not". 12. The factual matrix of the case suggest that one Memorandum of Understanding (in short 'MOU') dated 18th April, 2003 was drawn between two public sector companies i.e. Indian Oil Corporation Ltd. (in short 'IOCL') and Bongaigaon Refinery ....
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....s decided aforesaid, learned counsel appearing for the parties agreed that the present appeal be heard finally under Order 41 Rule 11 of the CPC. 18. Accordingly, considering the argument and the materials available on record, the following substantial question of law formulated by us as to settle the issue:- "Whether the second step of service i.e. storing/warehousing of raw crude oil at Barauni Refinery is incidental to the pipeline service or independent terminal facilities in terms of MOUs and other materials available on record?" 19. Factual background of present appeal suggests that the present dispute raised, when it was noticed by the Audit Team that the BRPL was receiving crude oil through Haldia-Barauni Pipeline Limited (HBCPL) from 01.04.2003 for which the terminating facilities of 'Barauni Refinery' is used for storage from where it was dispatched to BRPL for which the 'Barauni Refinery was charging terminating charges shown as "Miscellaneous Income Recovery of maintenance charges or facility for other" under Code-375, in trial balance during period 2003-04, 2004-05, 2005-06, 2006-07. A credit device (Dr./Cr. Note No.2214) being Rs. 1,16,89,499/- in 2003-....
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....t BRPL's cost." 25. A separate Consideration for aforesaid discharge facility was mentioned under Article 4 of the MOU. 26. The learned Commissioner, Service tax, Patna held that the "terminal" means "warehousing facility" in oil industry. 27. To examine the aforesaid, it would be apposite to reproduce Sub-Section 102 of Section 65 of the Finance Act, which defines "Storage and Warehousing" in the following manner:- "65.(102). "Storage and Warehousing" includes storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or any service provided by a cold storage." 28. Sub-Section (105) of Section 65 of the Finances Act enumerates those services which are "taxable services". Various kinds of services which are subjected to service tax are enumerated therein. We are concerned only with clause (zza) thereof, which deals with service pertaining to "Storage and Warehousing" of goods. Clause (zza) reads as under:- "65.(105) (zza) to any person, by a storage or warehouse keeper in relation to storage and warehousing of goods." 29. The cumulative reading of the aforesaid....
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....use, it can be immediately described as an act of 'storage'" 32. Summarizing all aforesaid factual aspects, we are convinced enough that without having any storage or warehousing facilities, crude oil not be transhipped from pipeline to other mode of transport as arranged by BRPL. Therefore, the terminal facilities or discharge facilities is nothing but store and warehousing of the crude oil before entering into third step of transportation which to be arranged by BRPL for final destination of supply of crude oil.. 33. The receiving of separate charge for aforesaid facilities is an admitted position in terms of MOU besides the charges received for pipeline division. It is almost an admitted position that in terms of MOU, the service tax or any tax shall be paid by pipeline division but, the factual aspect clearly suggests that the amount on which the service tax was paid by IOCL's pipeline division, not including the value of terminal charge or the charge for 'discharge facility' in terms of para-1.5 of the MOU. 34. Besides aforesaid issue, the other ancillary issues were also raised by learned counsel appearing for respondent that the respondent provided service to self i....
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.... factual scenario, it is clear that there is a provision of service as a discharge facilities in terms of MOU, which has been provided by IOCL to BRPL in connection with supply of tangible goods. There was no transfer of right of possession at any point and effective control over the goods continues to be with service provider and the goods i.e. crude oil are supplied for use by the recipient of the service. 39. Therefore, the contention of respondent that it was a self-service, i.e. to the IOCL itself is not a convincing argument and, as such, we are not inclined to accept this argument. 40. The another ancillary submission which was raised by respondent that it would be amount to double taxation, as tax has already deposited by the parent company but, same is also not convincing for the reason that the terminal charge could not have been transferred to the pipeline division and, therefore, the pipeline division had no opportunities or occasion to pay service tax in actual on that portion of value or service, which was transferred as terminal charge. 41. The record also suggests that respondent failed to produce any evidence of value on which service tax was paid by the p....
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....ite natural that under such a situation, the Pipeline Division paid service tax only on that portion of service charges which was transferred to them for providing 'transport through Pipeline' and not on 'Terminal Charges' which was directly transferred by IOC's Head Office to noticee. However, noticee claimed, without evidence that their Pipeline Division paid service tax on 'Terminal Charges' also. This is another attempt of noticee to mis-represent the facts with fraudulent intentions of evading service tax since noticee was well aware of their company's system of accounting and transfer of due share of payments which was transferred to them as 'Terminal Charges'. In view of facts above, noticee were required to pay service tax on 'Terminal Charges' but they neither obtained registration for same, nor paid the due service tax. They also did not file any periodical return for the same. Thus it was an attempt of willful contravention of provisions of Sections 67, 68, 69 & 70 of the said Act and Rule 4, 5, 6 & 7 of said Rules with intent to evade payment of duty. The service charges realised were not declared thus suppressed by them. Therefore extended period under Section 73 of th....
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....unt short paid by them, whichever is higher, for period starting with the first day after the due date till actual payment of aforesaid amount provided that total amount of penalty under this clause shall not exceed the aforesaid amount of Service Tax and Education Cess short paid by them. (d) I impose an additional penalty amounting to Rs. 1000/- (Rupees one thousand only) on M/s Indian Oil Corporation Limited, Barauni Refinery, Begusarai District, Bihar under section 75A/77 of the Finance Act, 1994. (e) I impose an additional penalty amounting to Rs. 1,16,00,126/- (Rupees one crores sixteen lakhs one hundred and twenty six only) on M/s Indian Oil Corporation Limited, Barauni Refinery, Begusarai District, Bihar under section 78 of Finance Act, 1994." 43. All such aforesaid factual aspects which were taken by learned Commissioner, Patna, completely overlooked by the learned CESTAT, Kolkata while reversing the order and merely on the ground that the entire operation of the transportation of crude oil from Haldia Port to BRPL is covered by a single contract, therefore, the terminal facilities are only intermediate operations of the transportation of the goods thr....