Commissioner of Service Tax vs Gecas Services India Pvt. Ltd.

CM Appeal No. 5536/2015 (for delay):

For the reasons stated therein, the delay of 83 days in filing the present petition is condoned. The application is dismissed.

CEAC15/2015 & CMAPPL No. 5535/2015 (for stay)

This appeal, under Section 35G of the Central Excises Act, 1944 (''CE Act'') read with Section 83 of the Finance Act 1994, is directed against the impugned final order dated 15th May 2014 passed by the Customs, Excise Service Tax Appellate Tribunal (''CESTAT'') in Sales Tax Appeal No. 781 of 2012.

The question that arose for consideration in the assessment proceedings involving the Respondent Assessee was whether the export of services provided by the Respondent constituted a ''service'' and was exigible to Service tax under Section 73(1) read with Section 66 and 68 of the Finance Act, 1994 read with Rules 6 of the Service Tax Rules 1994?

In the impugned order, the CESTAT has followed the decision of its Larger Bench in GAP International Sourcing (India) Pvt. Ltd. v. Commissioner of Service Tax, Delhi, 2015 (37) S.T.R. 757 (Tri.-Del.) and decided the question in the negative and in favour of the Assessee. The appeal by the Commissioner of Service Tax against the said decision being CEAC No. 99 of 2014 was dismissed by this Court by order dated 18th November 2014 on the ground of maintainability.

A preliminary objection has been raised by the Respondent as regards the maintainability of the present appeal before this Court. Reliance is placed on the decision of this Court in Commissioner of Service Tax Vs. Ernst and Young Pvt. Ltd., (2014) 27 GSTR 22 : (2014) 34 STR 3 : (2014) 72 VST 51 (hereafter Ernst & Young).

Section 83 of the Finance Act 1994, makes the provisions of Sections 35G and 35L of the CE Act ipso facto applicable in relation to Service tax. Section 35G concerns appeals to the High Court from orders of the CESTAT whereas Section 35L deals with appeals to the Supreme Court from orders of the CESTAT. Section 35L(b) provides that appeals from orders of CESTAT would lie directly to the Supreme Court where it involves the "the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment." In Ernst & Young this Court held that any question having relation to a rate of duty would include a determination as levy of tax on a particular service. It was held that "The words ''rate of tax'' in relation to rate of tax would include the question whether or not the activity is exigible to tax under a particular or specific provision." Accordingly, it was held that an appeal under Section 35-G of the CE Act against the order of the CESTAT on the question of exigibility of a service to tax was not maintainable before this Court. The Special Leave Petition (SLP) filed by the Appellant herein against the decision in Ernst & Young, being SLP [(CC) No. 21099] of 2014 (Commissioner of Service Tax v. Ernst and Young Pvt. Ltd.) (along with other similar petitions) was dismissed as withdrawn by the Supreme Court by its order dated 19th January 2015.

Following the decision in Ernst & Young, sub-section (2) was inserted in Section 35(L) of the CE Act by the Finance (No. 2) Act, 2014 to clarify that "the determination of any question having a relation to the rate of duty shall include the determination of taxability or excisability of goods for the purpose of assessment." A Circular was also issued on 10th July 2014 by the Tax Research Unit, Department of Revenue, Ministry of Finance, Government of India, New Delhi clarifying the position. Therefore, the appeal is dismissed as not maintainable in this Court. The application is also dismissed.