A division bench of the Bombay High Court has held that the levy of service tax is an issue relating to “rate of tax” and therefore, the Supreme Court has jurisdiction to decide the matter under section 35L Excise Act, 1944.
A show cause notice was issued to the assessee, M/s. Surindra Engineering Co. Ltd, stating that the service tax rendered by the assessee fell under the category of “erection, commissioning and installation service”.
The CESTAT held that the activity of laying of pipelines for water supply projects would not come under the category of erection, commissioning and installation service. The assessee approached the High Court on appeal.
A division bench comprising Justice Dhiraj Singh Thakur and Justice Abhay Ahuja observed that sub-section (2) to section 35L was inserted with effect from 6 th August 2014, i.e., prior to the passing of the order impugned in the present appeal by the CESTAT.
“Even otherwise, this Court in the case of Commissioner of Central Excise, Mumbai-V Vs. Reliance Media Works Ltd. 3 has held that insertion of sub-section (2) to section 35L was clarifcatory, and therefore, the issue of taxability and excisability would be an issue relating to rate of duty of excise/services for the purpose of assessment for which an appeal from the order of the Tribunal could be entertained only by the Hon’ble Supreme Court and not by the High Court in terms of sections 35G of the Excise Act,” the High Court said.
Dismissing the appeal, the High Court observed that “In view of the clear mandate, sub-section (2) of section 35L of the Excise Act, since the issue involved in the present appeal pertains to whether the service rendered by the assessee is a taxable service or not, in our opinion, this Court would have no jurisdiction to entertain the appeal.”
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