Dismissed

Commissioner of GST and Central EXCISE,R0URKELA v. K.D.Sharma

Orissa HC10 Jan 2023OTAPL/3/2018

Case brief

AI extract

What is this about?

The High Court of Orissa dismissed the Revenue's appeal against CESTAT's order on maintainability grounds. The Court held that the appeal lies only to the Supreme Court following a Karnataka High Court precedent on jurisdiction over classification disputes.

What did the court decide?

Appeal disposed of; no interference with CESTAT order.

Commissioner of GST and Central EXCISE,R0URKELA Vs… — GST and Indirect Tax | Orissa HC (2023)

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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OTAPL No. 3 of 2018

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…. Commissioner of GST & Central Appellant Excise, Rourkela Commissionerate

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Mr. Choudhury Satyajit Mishra, Senior Standing Counsel

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-versus-

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K.D. Sharma Proprietor

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…. Respondent Mr. Kartik Kurmy, Advocate

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CORAM:
THE CHIEF JUSTICE
JUSTICE M.S. RAMAN
ORDER
10.01.2023

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Order No.

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The present appeal by the Department arises from an order dated

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14^th July, 2017 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Eastern Zone, Kolkata disposing of the Assessee’s Service Tax Appeal No.ST/133/2008-DB and thereby setting aside the order dated 30^th March, 2007 passed by the Commissioner of Central Excise, Customs & Service Tax.

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The background facts are that the Respondent-Assessee is a Raising & Transporting Contractor engaged in carrying out mining activities like raising, shifting, loading and unloading and loading into Railway wagons of Iron Ore at Kalta Iron Ore Mines, Raw Material Division of Steel Authority of India at Kalta, Sundargarh,

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Page 1 of 4

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Orissa in terms of a work agreement entered into between the Assessee and the SAIL since August 2002.

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On the basis that the Assessee was rendering ‘Cargo Handling Service’ under Clause-23 of Section 65 of the Finance Act, 1994, a Show-Cause Notice (SCN) was issued on 3^rd August, 2004 seeking to raise the demand of service tax on the basis that the Assessee had been rendering ‘Cargo Handling Services’. Against the adjudication order of the Commissioner of Central Excise dated 30^th March, 2007, an appeal was filed by the Assessee before the CESTAT. The Tribunal agreed with the Assessee that the work carried out by the Assessee is essentially one of mining and, therefore, it was only with effect from 1^st June, 2007 a specific entry for tax on mining services was introduced in the Finance Act. On that basis, it was held that the impugned demand was unsustainable in law and the adjudication order was set aside.

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A preliminary objection has been raised by Mr. Kartik Kurmy, learned counsel appearing for the Respondent-Assessee that since the tax effect of the present appeal is below the monetary limit of Rs. 1Crore, the present appeal is not maintainable.

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Mr. Choudhury Satyajit Mishra, learned Senior Standing Counsel for the Department, on the other hand, submitted that if the penalty amount is included then the monetary limit would be above Rs.1Crore. Secondly, he submitted that in terms of Para-4 of the instruction dated 22^nd August, 2019 of the Central Board of Indirect Taxes & Customs (CBITC) since the appeal involves a substantial

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Page 2 of 4

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question of law as described in Para-1.3 of the earlier instruction dated 17^th August, 2011, the present appeal is maintainable. In support of his contention regarding substantial question of law, he referred to an order passed by this Court on 4^th May, 2016 referring the issue on classification of the services, i.e., whether as mining services or Cargo Handling Services to the larger Bench of the CESTAT.

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Mr. Kurmy, learned counsel appearing for the RespondentAssessee pointed out that the said order of this Court was subsequently recalled and, therefore, the matter was no longer before the larger Bench of the CESTAT.

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Mr. Kurmy has also drawn attention of the Court to Para-2 of the Circular dated 17^th August, 2011 which according to him clarifies that the expression “Monetary limit” would essentially refer to the excise duty involved and would not include the penalty or interest amount. Since the basic duty involved is below Rs.1Crore, the appeal is certainly below the monetary limit.

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Further, whether the service carried out by the Appellant is Cargo Handling Services or mining service is essentially a classification dispute. Consequently, following the Judgment of the Karnataka High Court in Commissioner of S.T. Bangalore v. Scott Wilson Kirkpatrick (I) Pvt. Ltd. 2011 (23) STR 321 (Kar) , the Court holds that the appeal against the order of the CESTAT would lie if at all only to the Supreme Court of India.

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Page 3 of 4

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For all of the aforementioned reasons, the Court declines to interfere in the present appeal, leaving it open to the Department if it so chooses to avail any other remedy available to it in accordance with law. The appeal is disposed of.

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(Dr. S. Muralidhar)

Chief Justice

S. Behera

(M.S. Raman)
Judge

Page 4 of 4

Commissioner of GST and Central EXCISE,R0URKELA v. K.D.Sharma

Case brief

What is this about?

What did the court decide?

Commissioner of GST and Central EXCISE,R0URKELA v. K.D.Sharma

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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