ST - It is only after service is classified would question of exclusion of export services from service tax, if classifiable under head 'Cargo Handling Services', arise - High Court has no jurisdiction to entertain such an appeal: HC
By TIOL News Service
MUMBAI, SEPT 13, 2018: THE appellant assessee is before the Bombay High Court against the CESTAT order - 2014-TIOL-1751-CESTAT-MUM and raises the following questions of law-
(a) Whether in the facts and circumstances of the case, the Tribunal was correct in holding that the activity of providing an earmarked space within the container Freight Station to some customers for the specific purpose of stuffing export Cargo into containers was a Taxable or not covered under the head "Storage and Warehousing Services" ?
(b) Whether in the facts and circumstances of the case, the legislative intent of not taxing services in relation to export cargo could be frustrated by seeking to tax one of the legs of the transaction of exporting goods, contrary to the statutory intention?
(c) Whether in the facts and circumstances of the case, a partial extended period of limitation could have been invoked (from February 2005 onwards) when otherwise the Tribunal dropped penalty proceedings under Section 78 and also concluded that facts had been declared?
The counsel for the Revenue raised a preliminary objection that the impugned order revolves on issue of classification of the services either as "Cargo Handling" services or "Storage and Warehousing" services and hence the appeal, in view of Section 35G(1) of the Act would not be maintainable before this Court. Reliance is also placed on the decision in Bajaj Auto Ltd. - 2015-TIOL-3028-HC-MUM-ST where the Court held that the disputes relating to classification of goods would be outside of the jurisdiction of the High Court.
The appellant contended that the issue is with regard to the taxability of the services rendered at the CFS of storage etc. in respect of goods exported and hence their appeal should be entertained. Reliance is placed on the decision in Global Vectra Helicorp Ltd. Vs. C.S.T. Mumbai, (CEA No.66 of 2014 decided on 23rd March, 2015) wherein the High Court entertained the issue with regard to the taxability of the services even after the introduction of the amendment made to Section 35L of the Act by inserting sub-Section 2 therein w.e.f. 6th August, 2014 in respect of orders of the Tribunal prior to the insertion of subsection (2) of Section 35L of the Act.
The High Court considered the submissions and remarked-
+ The jurisdiction to entertain an appeal would depend/be determined by the nature of the order passed by the Tribunal. The ingenuity of the advocate in framing the question, cannot change the nature/basis of the order of the Tribunal .
+ In fact, whatever the nature of question proposed by the appellant, it is for the Court to formulate the substantial question of law in the context of the order being impugned. Therefore, if the order of the Tribunal is an order relating to a question having relation to the rate of duty or value of goods for the purposes of assessment, the jurisdiction of this Court is barred by virtue of Section 35G of the Act. [Raja Dyeing - 2017-TIOL-552-HC-P&H-CX agreed with]
On perusing the order impugned, the High Court further observed-
"…We find that the issue which arises in this appeal is whether the consideration which is received under the head "Cargo Handling" services is in fact consideration received for services clas sifiable under "Storage and Warehousing" services as contended by the Revenue. According to the Revenue, a part of the consideration received is for services rendered under the head "Storage and Warehousing" services while according to the appellant, the entire services are classifiable under the head "Cargo Handling" services. Thus, the dispute is with regard to classification of services. It is only after the service is classified into its appropriate head would the question of exclusion of export services from service tax, if classifiable under the head "Cargo Handling Services" would arise. Thus, the primary issue which would arise is classification of the Services of giving space for storage to MLIL and others for consideration…Therefore, in terms of Section 35G(1) of the Act, this Court would have no jurisdiction to entertain such an appeal…"
In fine, it was held that the appeal is not maintainable before the High Court.
The appeal was disposed of.
(See 2018-TIOL-1891-HC-MUM-ST)
