M/S Pankaj Gupta vs. Customs Central Excise And Service Tax

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CEA/107/2017HC Madhya Pradesh17 April 2018Author: HON'BLE SHRI JUSTICE P.K. JAISWAL5 pages
For Petitioner: Mukesh Agrawal
AI SummaryPartly Allowed

What did the High Court hold?

The High Court accepted the appellant's prayer and treated the appeal as in time, acknowledging the provision for rectification under Section 35EQ of the Central Excise Act, 1944, and stating that the nomenclature of the application and order makes no difference. On merits, the court noted that the ratio laid down by the Supreme Court in Assistant Commissioner of Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd. was not disputed. Applying the law laid down by the Bombay High Court in Sheth and Sure Engineering Pvt. Ltd. Vs. Union of India and the Supreme Court in CCE and Customs Vs. Larser and Toubro Ltd., the court held that works contract cannot be vivisected and taxed under different Acts. The work contract service involved in the present case, erection, commission, and installation, would not be leviable to service tax as the demand was made prior to 01.06.2007. Consequently, the orders dated 12.08.2015 and 29.07.2017 were set aside, and the matter was remitted back to the CESTAT for a fresh decision. Both substantial questions of law were decided in favor of the assessee.

What were the facts?

The appellant, M/s Pankaj Gupta, filed an appeal against an order dated 29.03.2017 and an earlier order dated 12.08.2015 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT, by its order dated 12.08.2015, dismissed the appellant's appeal, holding that service tax was payable on works contract service prior to 01.06.2007, relying on a Delhi High Court decision. The appellant then filed a review petition before the CESTAT for rectification of this order, which was dismissed on 29.03.2017, stating no provision existed for review under the Central Excise Act, 1944. The present appeal was filed on 05.10.2017. The revenue contended that the appeal was time-barred.

What were the issues?

1. Whether the CESTAT's order dated 12.08.2015, holding service tax liable on works contract service prior to 01.06.2007, is vitiated in light of the Supreme Court's decision in CCE Vs. M/s Larsen and Toubro Ltd. (Question of law). 2. Whether a subsequent Supreme Court decision can render findings in an earlier CESTAT order a mistake of law apparent on record, entitling the CESTAT to recall its order to conform with the superior court's law (Question of law). Assessee's Contentions: - The CESTAT's order dated 12.08.2015, dismissing the appeal based on the Laser & Toubro Ltd. decision, was erroneous. - The review petition filed for rectification was wrongly rejected by the CESTAT, as law is settled that if a judgment on which an appeal was dismissed is corrected by a superior court, a rectification application is maintainable. - Reliance was placed on the Supreme Court decision in Assistant Commissioner of Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd. and decisions of the Kerala and Punjab & Haryana High Courts. - The present appeal is within the period of 180 days, making the revenue's oral objection on limitation not maintainable. - The matter should be remitted back to the CESTAT for fresh decision. Revenue's Contentions: - The appeal has not been filed within 180 days from the order dated 12.08.2015. - However, it was fairly submitted that a time-barred review application was filed and dismissed on 29.03.2017, and therefore, the present appeal is liable to be dismissed on limitation.

Which sections of the Income-tax Act were involved?

Section 35G,Section 25,Section 44,Section 35EQ

AI-generated summary — verify with the full judgment below

THE HIGH COURT OF MADHYA PRADESH CEA-107-2017 (M/S PANKAJ GUPTA Vs CUSTOMS CENTRAL EXCISE AND SERVICE TAX) Indore; Dated:17-04-2018 Shri S.Nema, learned senior counsel with Shri Gagan Tiwari, learned counsel for the appellant. Shri Amol Shrivastava, learned counsel for the respondent. Heard.

1.

This appeal is filed under Section 35G of the Central Excise Act,1944 against the order dated 29.03.2017 in Misc. Appeal No.249/2009 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 deserved to be set aside since its finding that service tax is liable on works contract service 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 Laser & 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 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 (Bombay) and law laid down by the Hon'ble Supreme Court Ltd. 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. (P.K. JAISWAL) (S. K. AWASTHI) JUDGE

JUDGE sourabh SOURABH YADAV Date: 2018.04.22 11:19:58 +05'30'

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