V.P. KHADER V. THE COMMISSIONER OF CUSOMS

C.E.Appeal/14/2018

AI Insights

The case revolves around the classification of services provided by the appellant, V.P. Khader, who operated a canteen for employees at M/s. Hindustan Newsprint Ltd. The Department of Central Excise assessed these services as 'out-door catering services' and imposed tax accordingly. The First Appellate Authority initially accepted the appellant's position, rejecting the classification as 'out-door catering'. However, a delayed appeal by the appellant was rejected by the Tribunal, leading to the current appeal before the High Court. The main legal question was whether the appellant could be held liable for tax when the service was not classified as taxable under the relevant Act.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 741546 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 03-09-2018
• Assessment Year: misc
• Other Referred Cases: CIT Madrass v. V. Mr.P Firm Muar [AIR (1965) SCC 1216], Mathuram Agrawal v. State of Madhya Pradesh[(1999)8 SCC 667], M/s. Singh Enterprises v. Commissioner of Central Excise, Amchong Tea Estate [(2010) 15 SCC 131]
• Laws Referred To: Finance Act, 1994
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SREELAL N WARRIER
• Assessee Lawyers: JOHN JOSEPH VETTIKAD
• Keywords: Central Excise; Condonation of delay; Delay in appeal; Taxable service; Out-door catering services
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 03RD DAY OF SEPTEMBER 2018 / 12TH BHADRA, 1940 C.E.Appeal.No. 14 of 2018 AGAINST THE ORDER/JUDGMENT IN ST 20090/2016 of CUSTOMS,EXCISE&SERVICE TAX APP.TRIBUNAL,BANGALORE APPELLANT: V.P. KHADER AGED 60 YEARS, S/O PATTANI RAWATHER, RESIDINGAT CHAKIRAMTHODU HOUSE, CHORAPPADOM, KAIRADY P.O.,THIRUVAZHIYAD VILLAGE, CHITTOOR TALUK, PALAKKAD DISTRICT-678 510. BY ADV. SRI. JOHN JOSEPH VETTIKAD RESPONDENT: THE COMMISSIONER FOR CENTRAL EXCISE, SERVICE TAX AND CUSTOMS, IS PRESS ROAD, KOCHI-682 018. OTHER PRESENT SRI. SREELAL N WARRIER, SC THIS CENTRAL EXICISE APPEAL HAVING BEEN FINALLY HEARD ON 03.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.E.APPEAL.NO.14/2018 ::2:: J U D G M E N T Vinod Chandran, J The Central Excise appeal has been filed raising several questions of law. The facts to be noticed are that the appellant was a contractor conducting a canteen in the premises of M/s. Hindustan Newsprint Ltd. The appellant was assessed for various periods under the Finance Act, 1994, holding the services extended by the appellant to be “out-door catering services”. The appellant asserted that there was no out-door catering carried on. On a contract awarded for running a canteen for employees, the premises of M/s. HNL was handed over to the appellant wherein he cooked food and served it to the employees. 2. Five assessment orders were passed against the assessee, against which appeals were filed as is seen from Annexure B. The Commissioner of Central Excise, the First Appellate Authority C.E.APPEAL.NO.14/2018 ::3:: refused to consider one of the appeals for reason of it being delayed. The other appeals which were filed in time were considered and the appellant's case accepted. The Department has not challenged the order of the First Appellate Authority. Finding one of the appeals to be delayed, the same was rejected by the First Appellate Authority, against which the appellant approached the Tribunal. The Tribunal also rejected the appeal, against which the present appeal is filed. 3. The question of law according to us, arising from the order of the Tribunal is as follows: Whether the assessee could be made liable to tax or demand raised; since the assessee was not carrying on a taxable service and in the assessee's own case, the First Appellate Authority had found the assessee to be not engaged in out-door catering services, which finding of the First Appellate Authority has been accepted by the Department? C.E.APPEAL.NO.14/2018 ::4:: 4. The learned Counsel appearing for the appellant relied on CIT Madrass v. V. Mr.P Firm Muar [AIR (1965) SCC 1216] and Mathuram Agrawal v. State of Madhya Pradesh[(1999)8 SCC 667]. 5. The learned Sanding Counsel appearing for the Revenue would submit that Mathuram Agrawal (supra) would not be applicable,since there the question was with respect to the challenge against the charging section which was held to be ultra vires. The learned Standing Counsel would rely on (2008) 3 SCC 70 (M/s. Singh Enterprises v. Commissioner of Central Excise) and Amchong Tea Estate [(2010) 15 SCC 131] 6. Singh Enterprises was relied on in Amchong Tea Estate ( both supra). The consideration therein was whether there could be condonation of delay, where the statute prescribes a specific period of limitation and also provides for the extended period in which the delay could be condoned. It was held that the Commissioner and the Tribunal being creatures of statute could not C.E.APPEAL.NO.14/2018 ::5:: have condoned such delay beyond the period provided for condonation. We are also of the opinion that there could have been no condonation of delay as such and the First Appellate Authority or the Tribunal could not have acted otherwise. 7. We are quite conscious of the fact that we are dealing with an appeal as provided under the statute, but that does not make us a creature of statute. The High Court exercising its extra-ordinary power, could also look into the hardship caused especially in the context of the Appellate Authority having found the specific transaction to be not taxable and not coming within the ambit of a taxable service under the Finance Act, 1994. Useful reference can be made to P.Firm Muar(supra), wherein it was held “if a particular income is not taxable under the Income Tax Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine. Equity is out of place in tax law; a particular income is statute (sic) (it must be 'taxable') or it is not, the Income Tax Officer has no power to impose C.E.APPEAL.NO.14/2018 ::6:: tax on the said income.” [the clarification within the brackets supplied by us]. In the present case, as we already noticed, there is no taxable transaction insofar as the transaction of the appellant having been held to fall outside the definition of out-door catering service, on which alone, the assessment was made under the Finance Act, 1994. 8. We are of the opinion that the Assessing Officer could not have imposed tax, especially on the finding rendered by the First Appellate Authority which is accepted by the Department. We direct that the demand made be not proceeded with on the following condition being complied. We notice that there was considerable delay in having filed the appeal, and in such circumstances we direct the appellant to pay an amount of Rs.25,000/- (Rupees Twenty Five Thousand only) towards the Chief Minister's Relief Fund of the Kerala State, upon which there would be no recovery effected on the demand raised on Annexure A. We make it clear that if such amounts are not paid within a period of one month and the receipt produced before the C.E.APPEAL.NO.14/2018 ::7:: respondent, the respondent would be entitled to proceed for recovery. C.E Appeal is disposed of. Sd/- K.VINOD CHANDRAN Judge Sd/- ASHOK MENON jma Judge C.E.APPEAL.NO.14/2018 ::8:: APPENDIX APPELLANT'S ANNEXURES ANNEXURE A : TRUE COPY OF THE ORDER IN ORIGINAL NO. 11/2009 ST PASSED BY THE DEPUTY COMMISSIONER OF CENTRAL EXCISE, KOTTAYAM DIVISION ANNEXURE B : TRUE COPY OF THE COMMON ORDER DT 02.07.02014 IN APPEAL NOS. 125/ST/CHN/2008, 261/ST/CHN/2009, 16/ST/CHN/2010, 121/ST/CHN/2011 AND 92/ST/CHN/2012 OF THE COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX (APPEALS) ANNEXURE C : THE CERTIFIED COPY OF THE ORDER OF THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH RESPONDENT'S ANNEXURES: NIL //TRUE COPY// "