M/S Gopal Enterprises vs. Customs Central Excise And Service Tax

PDF · subscribers
CEA/106/2017HC Madhya Pradesh20 April 2018Author: HON'BLE SHRI JUSTICE P.K. JAISWAL4 pages
For Petitioner: Mukesh Agrawal
AI SummaryPartly Allowed

What did the High Court hold?

The High Court allowed the appeal in part. It noted that the substantial questions of law were identical to those in a related case, CEA No. 107/2017 (M/s. Pankaj Gupta vs. Central Excise & Service Tax), which was decided on 17.04.2018. In that case, the Court accepted the appellant's prayer and treated the appeal as in time. The Court acknowledged the law laid down by the Supreme Court in CCE and Customs Vs. Larsen and Tubro Ltd., which held that works contracts cannot be vivisected and taxed under different Acts, and that erection, commission, and installation services involved in the present case would not be leviable to service tax as the demand was made prior to 01.06.2007. Consequently, the High Court set aside the CESTAT's orders dated 12.08.2015 and 29.03.2017 and remitted the matter back to the CESTAT to decide it afresh. Both substantial questions of law were decided in favour of the assessee. The operative direction was to remand the matter for fresh adjudication.

What were the facts?

The assessee, M/s. Gopal Enterprises, filed an appeal before the High Court of Madhya Pradesh against an order dated 29.03.2017 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and an earlier order dated 12.08.2015. The CESTAT's order dated 12.08.2015 had dismissed the assessee's appeal, holding that service tax was liable on works contract services prior to 01.06.2007, relying on a Delhi High Court decision. The assessee then filed a review petition before the CESTAT for rectification of this order, which was dismissed on 29.03.2017, stating that no review was permissible under the Central Excise Act, 1944, for mistakes apparent on record. The assessee argued that subsequent Supreme Court decisions could render earlier CESTAT orders legally flawed and allow for rectification.

What were the issues?

1. Whether the CESTAT's order dated 12.08.2015, holding service tax liable on works contract services prior to 01.06.2007, is vitiated in light of the Supreme Court's decision in CCE Vs. M/s Larsen and Tubro Ltd. (Civil Appeal No. 6770/2004)? (Question of law). The assessee contended that the CESTAT's reliance on a lower court decision was erroneous given the subsequent Supreme Court ruling. The revenue's contentions are not recorded. 2. Whether a subsequent Supreme Court decision can render an earlier CESTAT order a mistake of law apparent on record, entitling the CESTAT to recall its order for conformity with the law laid down by the Supreme Court? (Question of mixed law and fact). The assessee argued, citing decisions in Assistant Commissioner of Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd., Kil Kotagiri Tea and Coffee Estates Co. Ltd. Vs. Income Tax Appellate Tribunal, and Commissioner of Income Tax Vs. Smt. Aruna Luthra, that rectification is permissible when superior courts correct the law on which an earlier decision was based. The revenue's contentions are not recorded.

Which sections of the Income-tax Act were involved?

Section 35G,Section 25,Section 44

AI-generated summary — verify with the full judgment below

HIGH COURT OF MADHYA PRADESH BENCH AT INDORE C.E.A. No.106/2017 Indore, Dated:20/04/2018 Shri S. Nema, learned senior counsel with Shri Gagan Tiwari, learned counsel for the appellant. Shri Amol Shrivastava, learned counsel for the respondent. Heard. This appeal is filed under Section 35G of the Central Excise Act,1944 against the order dated 29.03.2017 in Misc. Appeal No.248/2009 and the order dated 12.08.2015 passed by the Customs, Excise and Service Tax, Appellate Tribunal, Principal Bench, West Block No.2, New Delhi.

2.

This appeal is admitted on the following substantial question of Law:- "A. Whether the order dated 12.08.2015 passed by the CESTAT deserves to be set aside since its finding that service tax is liable on works contract services prior to 01.06.2007 is vitiated in view of the decision of the Hon'ble Supreme Court in civil appeal no.6770/2004 in CCE Vs. M/s Larsen and Tubro Ltd. B. Whether the order dated 29.03.2017 passed by the CESTAT deserves to be set aside because even a subsequent decision rendered by the Supreme Court would render the findings in an earlier order of CESTAT as mistake of law apparent on record and would entitle the CESTAT to recall its order to bring it in conformity with the law laid down by the Supreme Court."

3.

Learned senior counsel for the appellant has drawn our attention to the order dated 12.08.2015 and submitted that learned Tribunal relying on the decision of Delhi High Court in the case of Larsen & Toubro Ltd. Vs. CST reported in (2015) 58 taxmann.com 52/51 GST 297 (New Delhi -CESTAT) dismissed the appeal of the appellant by holding that service tax on demand, which was made prior to 16.06.2007 was payable.

4.

Against the aforesaid order, the review petition for rectification of order was filed before the Tribunal which was dismissed by the Learned Tribunal on 29.03.2017 on the ground that no review of order can be done under the name of rectification of the mistake apparent on record as there is no provision under the Central Excise Act,1944, therefore, review is not maintainable and the same has been dismissed.

5.

He has drawn our attention to the Sections 25 and 44 of the Act and law laid down by the Hon'ble Supreme Court in appellant passed in C.E.A. No.107/2017 (M/s. Pankaj Gupta vs. Central Excise & Service Tax) and prays for same relief in this case.

7.

The relevant paras of C.E.A. No.107/2017 passed on 17/04/2018 reads as under:- “11. On considering the aforesaid and the law laid down by the Hon'ble Supreme Court and the full bench judgment of Punjab and Haryana and Kerala Bench, we accept the prayer of learned appellant and treat this appeal in time.

12.

On merits it is not disputed by the learned counsel for the parties regarding the ratio laid down by the Hon'ble Supreme Court in the case (Bombay) and law laid down by the Hon'ble reported in (2015) 60 taxmann.com 354/52 GST, dealing with the related basic concepts of “Work Contract indivisible works contracts”

and related principles held that works' contract cannot be vivisected into various components. It cannot be taxed under different Acts. The work contract service involved in the present case, the erection, commission and installation would not be leviable to service tax as demand was made prior to 01.06.2007. 14. For the aforementioned reasons, we set aside the orders dated 12.08.2015 and 29.07.2017 and remit the matter back to the Customs, Excise and Service Tax, Appellate Tribunal, Principal Bench, West Block No.2, New Delhi to decide it refresh. Both the substantial question of law is decided in favour of the Assessee by directing the learned Tribunal to decide the matter refresh.

15.

With the aforesaid, the appeal is allowed in part, to the extent as indicated herein-above but without any order as to costs.”

8.

In view of the above, the C.E.A. No.107/2017 (M/s. Pankaj Gupta vs. Central Excise & Service Tax) passed on 17/04/2018 shall apply mutatis mutandis in the present case.

9.

With the aforesaid direction, this appeal is allowed in part. (P. K. Jaiswal)

(Virender Singh) Judge

Judge soumya Ranjan Dalai Date: 2018.04.21 11:38:32 +05'30'

More judgments on Section 25

All 67 judgments and leading authorities on Section 25 →

Recent GST High Court judgments

Search GST case law →