Commissioner of Service Tax vs Saumya Construction Pvt. Ltd.

Harsha Devani, J.—This appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as "the Act") is directed against the order dated 25-9-2013 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (hereinafter referred to as "the Tribunal") in Appeal No. ST/479/2011-DB, whereby the Tribunal has allowed the appeal preferred by the respondent-assessee. The respondent-assessee M/s. Saumya Construction Pvt. Ltd. is engaged in the business of planning, execution for development and construction of commercial and residential projects/schemes. Investigation was carried out by the Revenue authorities as regards the liability of the assessee for payment of Service Tax, pursuant to which certain information was called for vide letter dated 12-8-2008, in response to which certain information came to be furnished by the assessee. However, the Revenue authorities were not satisfied with such information and called for further information which was furnished by the assessee through various letters. Still not being satisfied, the Revenue authorities summoned Shri Anish A. Shah, Director of the assessee-company for the purpose of recording his statement. The Revenue authorities during the course of investigation recorded statements of various persons and noticed that the assessee was having Service Tax registration for construction services in respect of commercial and industrial buildings and civil structures for different sites. Initially the assessee had obtained Service Tax registration numbers schemewise/projectwise; however, it had surrendered the three registration certificates and was having only one Service Tax registration. After detailed investigation, the Revenue authorities found as under:

The Revenue authorities came to the conclusion that the assessee had not discharged Service Tax liabilities in respect of various amounts received by it and accordingly, show cause notice dated 22-10-2009 came to be issued to it as to why demand of Service Tax under the category of ''Real Estate Agent'' should not be confirmed against it, and also for recovery of short payment of Service Tax under commercial and industrial construction services for availing ineligible benefit of abatement from the gross value. It was alleged that the assessee despite being registered for discharge of Service Tax liability under commercial and industrial construction with effect from 1-6-2007, has re-classified the services under the works contract services and has discharged less Service Tax.

The assessee contested the show cause notice on various grounds, as also on the ground of limitation. It was the case of the assessee that the development charges received by it cannot be considered as ''Real Estate Agent'' services and post 1-6-2007, the assessee is eligible to avail the benefit of works contract which was introduced from that date and can shift from commercial and industrial construction services to works contract services. The adjudicating authority did not agree with the contentions raised by the assessee and confirmed the demand of tax and also imposed penalty under various sections.

Being aggrieved, the respondent-assessee carried the matter in appeal before the Tribunal. By the impugned order, the Tribunal allowed the appeal by holding that the amount received by the assessee as development charges was nothing but in the form of profit, which would not get covered under the category of ''Real Estate Agent'' services. The Tribunal placed reliance upon a decision of this court in the case of Sujal Developers rendered on 22-4-2011 in Tax Appeal No. 1550 of 2010 Commissioner of Service Tax Vs. Sujal Developers, and held that the present case would be squarely covered by the said decision. It also held that the construction of residential complex services cannot be liable to Service Tax prior to 1-6-2007, if the assessee had paid Value Added Tax on the impugned activity as works contract. The Tribunal further held that the assessee correctly discharged the Service Tax liability by availing the abatement as given under Notification No. 12/2003.

Being aggrieved, the Commissioner of Service Tax has preferred this appeal by proposing the following questions, stated to be substantial questions of law:

"(i) Whether the Tribunal has committed serious error in interpreting the definition of Real Estate Agent defined u/s. 65(88) of the Finance Act, 1994 by not finding the respondent herein liable for discharge of Service Tax under the category of Real Estate Agent Service for the amount received by them as development charges?

(ii) Whether the Tribunal has committed serious error in not correctly considering the provisions of Works Contract (Compensation Scheme for Payment of Service Tax) Rules, 2007, which clarifies that service provider has option prior to payment of Service Tax in respect of such Works Contract and which does not allow to have option to be withdrawn till completion of Works Contract?

(iii) Whether the action of assessee in switching over from "Commercial or Industrial Construction Service" and "Construction of Complex Service" to "Works Contract Service" for the projects which were already under execution on 1-6-2007 was legal?"

Mr. Deven Parikh, Senior Advocate, learned counsel for the respondent, at the outset, raised a preliminary contention as regards the very maintainability of the tax appeal, submitting that the issue involved in the present case is directly related to the rate of duty or value of the services and as such, the appeal against the impugned order passed by the Tribunal would lie before the Supreme Court and not before this court and therefore, the appeal requires to be dismissed on this ground alone. Reference was made to the provisions of Section 35G of the Act, to point out that against an order passed in appeal by the Appellate Tribunal, an appeal shall lie to the High Court if such order is not 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. It was submitted that, therefore, the next question is to decipher whether the question of law proposed by the appellant relates to the rate of duty or value of the services involved. The attention of the court was invited to the questions proposed by the appellant to point out that the same clearly relate to the category of services under which the assessee would fall and the controversy involved in this case, therefore, essentially relates to a classification dispute which has a direct and proximate relation to the rate of duty and the nature of services rendered by the assessee. Under the circumstances, against the impugned order of the Tribunal, appeal would lie before the Supreme Court under Section 35L of the Act and not before this court.

6.1 In support of his submissions, the learned counsel placed reliance upon the decision of the Andhra Pradesh High Court in the case of Commissioner of Central Excise Vs. Shriram Refrigeration Industries [Presently known as Tecumseh Products India Ltd.], , the decision of this court in the case of Commissioner of Central Excise & Customs v. Swiss Glass Coat Equipments Ltd.- 2011 (273) E.L.T. 364 (Guj.), the decision of the Kerala High Court in the case of The Commissioner, Central Excise, Customs and Service Tax Vs. M/s. Kerala State Beverages (Manufacturing and Marketing) Corporation Ltd., , the decision of the Karnataka High Court in the case of Commissioner of Service Tax Vs. Scott Wilson Kirkpatrick (India) Pvt. Limited, and the decision of this court in the case of Commissioner of Central Excise Vs. JBF Industries Ltd., .

6.2 The decision of the Supreme Court in the case of Union of India (UOI) and Another Vs. Guwahati Carbon Ltd., , was cited for the proposition 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.

6.3 The learned counsel placed strong reliance upon the decision of the Karnataka High Court in the case of Commissioner of S.T., Bangalore v. Scott Wilson Kirkpatrick (I) Pvt. Ltd. (supra), wherein the court after referring to various decisions on the controversy in issue, held that all disputes emanating from the orders determining the rate of Service Tax and value of service, which has reached finality are to be determined by the High Court and not disputes arising prior to the stage of determining the rate of Service Tax and value of service. It was submitted that the present case relates to the latter part, namely, the disputes involved arise prior to the stage of determining the rate of Service Tax and value of service and as such, the appeal would lie before the Supreme Court.

6.4 The attention of the court was also invited to the show cause notice issued by the appellant, which ultimately culminated into the impugned order passed by the Tribunal, to point out that the issue involved is purely a classification dispute and that the question as to whether or not the activity of the assessee is covered under the category of ''Real Estate Agent'' services does not fall within the ambit of Section 35G of the Act so as to vest the High Court with the jurisdiction to adjudicate upon it.

On the other hand, Mr. Y.N. Ravani, learned standing counsel appearing on behalf of the appellant, submitted that the main controversy involved in the present case relates to the manner in which the Tribunal has disposed of the appeal and therefore, the same has no proximal relation to the determination of the rate of duty or value of the services and hence, the appeal is maintainable. It was submitted that while it is true that various questions of law have been proposed, including the questions relating to the rate of duty or value of goods; however, if the consideration of the appeal is limited to the infirmities in the impugned order, no question of rate of duty or value of services would be required to be adjudicated by the court and this court is duly empowered to decide the other issues. Referring to the impugned order, it was submitted that the Tribunal has merely referred to the decision of the High Court in the case of Commissioner of Service Tax v. Sujal Developers and has held that the case is squarely covered by the said decision without discussing as to how the said decision is applicable to the facts of the present case. Under the circumstances, the impugned order passed by the Tribunal being a non-speaking order is required to be quashed on this ground alone and hence, it would not be necessary for the court to enter into other aspects of the matter, including the question relating to the determination of rate of duty or value of services and as such, it is well within the jurisdiction of this court to decide this appeal.

7.1 In support of his submissions the learned counsel placed reliance upon the decision of this court in the case of Anil Products Limited Vs. Commissioner of Central Excise, : Anil Products Limited Vs. Commissioner of Central Excise, , wherein a similar objection had been raised as regards the maintainability of the appeal on the ground that the same involved a dispute regarding classification. The court observed that the order of the Tribunal was alleged to be a non-speaking and non-reasoned one and that the objection raised by the Revenue was that the appeal was not maintainable as the same involved a classification dispute, and held that the question framed clearly indicated that the main grievance was about the order being a non-speaking one and hence, the tax appeal was maintainable if the court concentrated on that question, leaving aside the question of classification. It was submitted that the above decision would be squarely applicable to the facts of the present case and therefore, the objection as regards the maintainability of the appeal does not merit acceptance and deserves to be rejected, and the appeal is required to be entertained.

In rejoinder, Mr. Deven Parikh, learned counsel for the respondent, invited the attention of the court to the questions proposed by the appellant, to submit that no question has been raised as regards the impugned order being a non-speaking one so as to limit the consideration of the appeal to the order of the Tribunal being a non-speaking and non-reasoned one. It was, accordingly, urged that the principal controversy in the present case being related to the determination of the value of the services, this appeal is not maintainable.

In the backdrop of the facts and contentions noted hereinabove, it would be necessary to first deal with the preliminary objection raised by the learned counsel for the respondent regarding non-maintainability of the appeal. For this purpose it would be necessary to decide as to whether the impugned order passed by the Tribunal is 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, so as to bar the jurisdiction of the High Court to adjudicate upon the issue.

Before adverting to the rival contentions, it would be germane to refer to the decisions on which reliance has been placed by the learned counsel for the assessee.

In Commissioner of Central Excise & Customs v. Swiss Glass Coat Equipments Ltd. (supra), this High Court has agreed with the view taken by the Andhra Pradesh High Court in the case of Commissioner of Central Excise, Hyderabad-IV v. Shriram Refrigeration Industries (supra), wherein it has been held that whether the process undertaken by a manufacturer amounts to manufacture or not, and if the goods produced during the process are excisable or not, would fall within the meaning of expression "determination of the rate of duty of excise or the value of the goods for purposes of assessment of duty".

In C.C.E., C. & S.T., Thiruvananthapuram v. Kerala State Beverages, the Kerala High Court held thus :

"4. The ratio of the precedents cited in support of the objection as to maintainability is that the question as to whether any goods are excisable or not, would also fall within the exclusion in terms of sub-section (1) of Section 35G and that the bifurcation of jurisdiction between the Supreme Court and the High Courts seems to be clearly intended, also to exclude conflict 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 rate of duty of excise" is part of the exclusionary clause in Section 35G(1). Reverting to Section 35L, we notice that clause (b) thereof provides for an appeal to the Supreme Court from any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise. This means that anything attendant to the determination of any question having a relation to the rate of duty of excise would also fall within the trappings of the exclusion, thus, taking the jurisdiction away from the High Court; to be agitated before the Supreme Court in terms of Section 35L.

Thinking a little deeper, if we were to understand the classification on jurisdiction to be that what would fall before the Apex Court are only appeals either as to the rate of duty or as to the value of goods for the purpose of assessment, we may immediately note that rate of tax is a prescription of the Parliament and it is not part of judicial function to tinker with the rate of tax. This has also been noticed in Karnataka State Beverages Corporation Ltd. (supra). Secondly and more importantly, if we were to find jurisdiction with the High Courts to decide as to whether there could be levy of duty of excise in relation to a particular situation, incidence or goods, that would be conceding to the position that what would be left to the Supreme Court is only to determine the rate of tax and the value of goods for the purpose of assessment which matters would get confined to issues which are fundamentally inferior in jurisprudential content vis-a-vis questions relating to the coverage itself. We do not see that the Act envisages that the High Courts would have the power of such nature that they decide the question of coverage; leaving to the Supreme Court only issues relating to the rates, sans the issue of coverage. We say this in furtherance of the reasoning that led to the precedents cited on behalf of the respondent."

In Commissioner of Central Excise v. JBF Industries Ltd. (supra), this court has held that the question as to the applicability of a notification or a circular which has a bearing on the determination of duty is a question which has a direct and proximate relationship to the rate of duty and to the value of goods for the purposes of assessment. In Union of India v. Guwahati Carbon 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.

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 whether any Service or not, whether the process if any undertaken in the service centre amounts to taxable service or not, and if the service rendered 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. 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 that 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 the rate of tax is to be understood in the sense it is suggested, Sections 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 Sections 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 rate of tax means only the rate at which tax is payable or a fraction is unsustainable.

Broadly, the following disputes do not fall within the jurisdiction of the High Court under Section 35G of the Act:-

(a) Dispute relating to the Service Tax payable on any service/taxable service.

(b) The value of the taxable service for the purposes of assessment.

(c) A dispute as to the classification of services.

(d) Whether those services are covered by an exemption notification or not?

(e) Whether the value of services for the purposes of assessment is required to be increased or decreased?

(f) The question of whether any services are taxable services or not?

(g) Whether an activity is a service rendering activity or not, so as to attract levy of Service Tax?

(h) Whether a particular service falls within which heading, sub-heading of Section 65(105) of the [Finance] Act, 1994 which defines "taxable Service".

The court held that 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 underlining this bifurcation of the jurisdiction between the Apex Court and the High Courts. All other matters other than what is set out above, which relates to the individual service providers and all disputes based on assessment orders which have attained finality, such as the benefits to which they are entitled to refunds, duty drawbacks, rebates, etc., which relate to a particular manufacture falls within the jurisdiction of the High Courts. In other words, all disputes emanating from the orders determining the rate of Service Tax and value of service, which has reached finality are to be determined by the High Court and not disputes arising prior to the stage of determining the rate of Service Tax and value of service."

The above decision of the Karnataka High Court has been followed by it in a subsequent decision in the case of Commissioner of Central Excise, Customs & Service Tax v. Bellary Computers 2014 (33) S.T.R. 504 (Kar.) , and by the Allahabad High Court in the case of Royal Bank of Scotland N.V. Vs. Commissioner of Cus. and C. Ex., .

Reference may now be made to the relevant statutory provisions. The Finance Act, 1994 does not provide for any mechanism for appeal against an order made by the Appellate Tribunal under Section 86 thereof. However, Section 83 thereof provides for the application of certain provisions of the Central Excise Act, 1944 and reads thus:

"83. Application of certain provisions of Act 1 of 1944.- The provisions of the following sections of the Central Excises and Salt Act, 1944 as in force from time to time, shall apply, so far as may be in relation to Service Tax as they apply in relation to duty of excise."

It is in the light of the provisions of Section 83 of the Finance Act, 1994 that an appeal lies to the High Court under Section 35G and to the Supreme Court under Section 35L of the Central Excise Act, 1944 against any order passed by the Appellate Tribunal under Section 86 of the Finance Act, 1994. For the purpose of appreciating the controversy in issue, it would be germane to refer to the provisions of Section 35G and Section 35L of the Central Excise Act, 1944, which to the extent the same are relevant for the present purpose read as under:

"35G. Appeal to the High Court.- (1) An appeal shall lie to the High Court from 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 of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment."

In view of the provisions of Section 35G of the Act, an appeal would lie before the High Court against every order passed in appeal by the Appellate Tribunal, provided such order is not 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. While applying the said provision to an order passed in relation to Service Tax under the Finance Act, 1994, what would be required to be examined is as to whether the order passed by the Tribunal relates to the determination of the rate of Service Tax or the value of any service for the purpose of assessment.

Therefore, the moot question that arises for consideration is as to whether the order passed by the Tribunal is an order relating to determination of the rate of Service Tax or the value of any service for the purpose of assessment. As can be seen on a combined reading of Section 35G and Section 35L of the Act, if the order of the Tribunal relates to determination of the rate of duty, the appeal would lie before the Supreme Court and not before the High Court. The expression "rate of duty" has not been defined under the Act. However, for the purpose of considering the meaning assigned to the said expression, the Supreme Court in the case of Navin Chemicals Mfg. and Trading Co. Ltd. Vs. Collector of Customs, , has looked into the Explanation under Section 35E of the Central Excise Act which deals with the powers of the Board or Commissioner of Central Excise to pass certain orders. Section 35E of the Act, insofar as the same is relevant for the present purpose, reads thus:

"35E. Powers of Board or Commissioner of Central Excise to pass certain orders. - (1) The Board may, of its own motion, call for and examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal or, as the case may be, the Customs and Excise Revenues Appellate 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 points in issue.

Explanation - For the purposes of this sub-section, the determination of a rate of duty in relation to any goods or valuation of any goods for the purposes of assessment of duty includes the determination of a question-

(a) relating to the rate of duty of excise for the time being in force, whether under the Central Excise Tariff Act, 1985 (5 of 1986), or under any other Central Act providing for the levy and collection of any duty of excise, in relation to any goods on or after the 28th day of February, 1986; or

(b) relating to the value of goods for the purposes of assessment of any duty of excise 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 First Schedule and the Second Schedule of the Central Excise Tariff Act, 1985 (5 of 1986), or the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), or the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 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."

On a plain reading of the above provision, the intention of the Legislature as regards the expression "determination of the rate of duty or value of goods" is clear, viz., it includes the determination of a question relating to the rate of duty of excise under the Central Excise Tariff Act or any other Central Act providing for levy and collection of duty, relating to the value of goods for the purpose of assessment of any duty of excise; whether any goods are excisable goods or whether the rate of duty of excise on any goods is nil; or whether any goods fall under a particular heading or sub-heading of the Schedules to the Central Excise Tariff Act, 1985 etc.; or whether 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 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 respect of such matters as are specifically provided in the Act.

It may be recalled that the first question proposed by the appellant is as to whether the Tribunal has committed a serious error in interpreting the definition of "Real Estate Agent" defined under Section 65(88) of the Finance Act, 1994 by not finding the respondent herein liable for discharge of Service Tax under the category of Real Estate Agent services for the amount received by them as development charges? The Tribunal, in the impugned order has held that the service rendered by the assessee does not get covered under the category of Real Estate Agent services. Evidently, therefore, the dispute involved in the present case relates to whether the activity carried out by the assessee is a service within the meaning of such expression as defined under the Finance Act, 1994; or whether such service falls under the category of taxable service under subsection (105) of Section 65 of the Finance Act, 1994. Therefore, the controversy involved in the present case is a classification dispute which has a direct and proximate relation to the rate of Service Tax or the value of any service. Consequently, this court has no jurisdiction to adjudicate upon the said controversy.

However, on behalf of the appellant, the learned counsel has submitted that the impugned order passed by the Tribunal is a non-reasoned and non-speaking order and as such, if the court considers the appeal to the limited extent of the above infirmities in the impugned order, no question of rate of duty or value of service would be required to be adjudicated and this court would be duly empowered to decide the same.

In this regard, a perusal of the questions proposed by the appellant reveals that no question has been raised with regard to the alleged infirmities in the impugned order of the Tribunal, namely, that the order of the Tribunal is a non-speaking and non-reasoned order. Under the circumstances, the learned counsel for the appellant cannot be permitted to advance such contention which has not been raised in the memorandum of appeal and in respect of which no question has been raised. Moreover, even if such contention were to be accepted, a perusal of the impugned order passed by the Tribunal reveals that the Tribunal, in Paragraph 7 thereof, has considered the issues before it, viz., (i) whether the appellant is liable to discharge Service Tax liability under the category of Real Estate Agent services for the amount received by them as development charges? (ii) whether the appellant is required to discharge the differential Service Tax liability under the head Commercial and Industrial Construction Services for the period post 1-6-2007? and (iii) whether the appellant has to be denied the benefit of Notification No. 12/2003 for availing abatement of 67% of the value and discharge of Service Tax liability on 33%? The Tribunal has, thereafter, discussed the facts of the case and the nature of the activities of the assessee and has, after considering the factual matrix based upon the evidence on record, come to the conclusion that the amount received by the assessee as development charges is nothing but a form of profit which would not be covered under the category of Real Estate Agent services. In support of such findings, the Tribunal has given reasons in Paragraphs 9, 10 and 11 of the impugned order. Thereafter, the Tribunal has reproduced the decision of this Court in the case of Sujal Developers (supra) and has held that the present case is squarely covered by the said decision. Thus, the Tribunal has applied the above decision of this court to the facts of the case.

On a plain reading of the impugned order passed by the Tribunal, it is apparent that the contention raised by the learned counsel for the appellant that the order passed by the Tribunal is a non-reasoned and non-speaking one and that merely after reproduction of the decision of this Court in the case of Sujal Developers (supra), the Tribunal has held that the issue involved in the present case is squarely covered by the said judgment, lacks merit and is contrary to the facts of the case. Under the circumstances, the submission that the impugned order suffers from the infirmity of being a non-speaking and non-reasoned one, is not borne out from the record of the case.

In the light of the above discussion, the contention advanced by the learned counsel for the appellant that the appeal be limited to the question as to whether the impugned order passed by the Tribunal is non-reasoned and non-speaking one, does not merit-acceptance.

The only question that then remains is on the merits of the case, which as noticed hereinabove, is as to whether the service rendered by the assessee is a service within the meaning of the said expression as envisaged under the Finance Act, 1994 and as to whether such service falls under the category of taxable service under sub-section (105) of Section 65 of the Finance Act, 1994, and if so, under which category of services, the same would fall. The issue involved in the present case has, therefore, a direct and proximate relation to the rate of Service Tax and the value of services and as such, this court lacks the jurisdiction to entertain this appeal and the appeal would lie before the Supreme Court under Section 35L of the Central Excise Act, 1944. In the light of the above discussion, the appeal fails and is dismissed on the preliminary ground of being not maintainable before this court.