Allowed

Central Railway v. Commissioner of Central Escise and Customs, Nagpur

Bombay HC25 Jul 2013RPA/46/2013

Case brief

AI extract

What is this about?

The Division Bench allowed a review petition following the insertion of Section 99 in the Finance Act 2013, which exempted services provided by Indian Railways prior to October 1, 2012 from service tax. The Bench recalled the previous order, disposed of the pending appeal by granting the applicant a complete waiver of the pre-deposit, and dismissed the review petition.

What did the court decide?

Complete waiver of pre-deposit granted pending hearing and final disposal of proceedings before the CESTAT.

Central Railway Vs Commissioner of Central Escise and… — GST and Indirect Tax | Bombay HC (2013)

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RPAL27-25.7

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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REVIEW PETITION (LODG.) NO.27 OF 2013 IN CENTRAL EXCISE APPEAL (LODG.) NO.35 OF 2013

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WITH CENTRAL EXCISE APPEAL (LODG.) NO.35 OF 2013

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Central Railway versus Commissioner of Central Excise and Customs, Nagpur

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..Review Petitioner/Appellant.

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..Respondent.

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Mr. Suresh Kumar for the Review Petitioner /Appellant. Mr. Pradeep S. Jetly with Ms. Suchitra Kamble for the Respondent.

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CORAM : DR.D.Y.CHANDRACHUD, AND S.C.GUPTE, JJ.

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25 July 2013.

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P.C. :

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A review has been sought of an order dated 8 February 2013 passed by the Division Bench. The Review Petitioner is the Central Railway.

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Two show cause notices were issued. The first show cause notice dated 13 October 2010 was for the period 2005-06, 2006-07 and 2007-08. The second show cause notice dated 3 May 2011 was for 2010-11. By the show cause notices dues of Rs.2.51 Crores and Rs.74.22 lacs respectively were demanded on the ground that the work which the Central railway had carried out of maintaining and repairing railway sidings owned by private parties constituted a taxable service within the meaning of Section 65(105)(zzg) of the Finance Act 1994. Both the show cause notices were adjudicated upon and the demands were confirmed. On appeal the CESTAT disposed of an application for stay by directing the Review Petitioner to deposit 50% of the service tax dues. When the Appeal came up for hearing before the Division Bench on 8 February 2013, this Court noted that by an exemption notification dated 27 July 2009 as amended on 21 January 2010, it appeared prima facie that the service provided for the management, maintenance or repair of railways was an exempted service. The

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Division Bench noted the submission of the Review Petitioner that the work of management and repair of railway sidings owned by private parties is an incident of the maintenance and repair of railway tracks and held that this would prima facie raise a substantial question for consideration. On these grounds, a complete waiver of the demand raised for 2010-11 in the amount of Rs.74.22 lacs by the show cause notice dated 3 May 2011 was granted. As regards the demand of Rs.2.51 Crores for the period 2005-06 to 2007-08 governed by the show cause notice dated 13 October 2010 which was prior to the exemption notification, the Division Bench ordered a pre-deposit of an amount equivalent to 20% of the demand.

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Counsel appearing on behalf of the Review Petitioner has submitted that by the Finance Act of 2013, Section 99 was inserted into the Finance Act of 1994 to the following effect :

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“Special provision for taxable services provided by Indian Railways.

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(1) Notwithstanding anything contained in section 66, as it stood prior to the 1^st day of July, 2012, or in section 66B, no service tax shall be levied or collected in respect of taxable services provided by the Indian Railways during the period prior to the 1^st day of October, 2012. (2) No refund shall be made of service tax paid in respect of taxable services provided by the Indian Railways during the said period prior to the 1^st day of October, 2012.”

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As a result it has been stated that for the period prior to 1 October 2012, no service tax shall be levied or collected in respect of the taxable services provided by the Indian Railways.

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Counsel appearing on behalf of the Revenue does not dispute the position. Hence, in view of the subsequent amendment which was brought by the Finance Act 2013, it would prima facie appear that no service tax is liable to be collected in respect of taxable services provided by the Indian Railways during the period prior to 1 October 2012. The Court would be justified in considering the effect of the subsequent legislative amendment which would constitute a valid ground for review within the meaning of Order 47 of the Code of Civil Procedure. The subsequent legislative amendment would prima facie indicate that the basis on which the Court had ordered pre-deposit has been altered retrospectively.

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In the circumstances, we allow the Review Petition and recall the order of the Court dated 8 February 2013. The appeal has by consent of counsel been taken up for admission and disposal on the review being allowed since a narrow issue is involved. Having regard to the legislative provision which has been noted above, we dispose of the Appeal and answer the question of law as framed in the order dated 8 February 2013 by granting to the Review Petitioner / Appellant a complete waiver of pre-deposit, pending the hearing and final disposal of the proceedings before the CESTAT. Both the Appeal and the Review Petition are accordingly disposed of.

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There shall be no order as to costs.

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(S.C. Gupte, J.)

Central Railway v. Commissioner of Central Escise and Customs, Nagpur

Case brief

What is this about?

What did the court decide?

Central Railway v. Commissioner of Central Escise and Customs, Nagpur

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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