GMMCO LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition, the petitioner impugns the order passed by the Commissioner of Customs and Excise dated 23.9.2011 confirming the demand of service tax for supply of tangible goods. The petitioner seeks a declaration that the leasing / renting of goods in a manner similar to the transaction which is the subject matter of the impugned order will not attract service tax under Section 65(105)(zzzzj) of the Finance Act, 1994. In the alternative, if this Court declines to grant relief as aforesaid, the petitioner seeks a direction to the respondents 4 and 5 to pay the entire amount of value added tax recovered from the petitioner to the respondent no.3 in discharge of liability towards the service tax payment.

(2.) The petitioner company lets heavy machinery on hire to its customers. A show cause notice dated 25.3.2010 was issued to the petitioner asking the petitioner to pay service tax on two counts. The demand was made for 'business auxiliary service', and the 'supply of tangible goods service'. By the impugned order dated 23.9.2011, the Commissioner of Customs and Excise dropped the demand in respect of the 'business auxiliary services'. By the said order, the demand for 'supply of tangible goods service' was confirmed. The Department was aggrieved by the order of the Commissioner dated 23.9.2011 holding that the demand in respect of the business auxiliary service was improper and was liable to be set aside. The Excise Commissioner filed an appeal against the dropping of that demand, under Section 86 of the Finance Act, 1994.

(3.) Since the statutory appeal is provided under Section 86 of the Finance Act against the order of the Commissioner Excise dated 23.9.2011, a preliminary objection is raised by the respondents to the tenability of the instant petition. According to the learned Assistant Solicitor General of India, the petition cannot be entertained in view of the efficacious alternate remedy provided under Section 86 of the Act. It is submitted that the issues involved in the case could be well adjudicated in the appeal provided under Section 86 of the Act. According to the learned counsel, it was necessary for the petitioner to have preferred an appeal under Section 86, especially when the appeal filed by the Excise Commissioner against the part of the impugned order dated 23.9.2011 is pending before the appellate authority. The learned counsel relied on the decisions reported in ( Indoworth India Ltd. vs. CESTAT, Mumbai, 2011 21 STR 688), (Nivaram Pharma Pvt.Ltd. vs. CEGAT, Madras,2008 12 STR 98) and an unreported order dated 23.8.2012 in W.P.No. 255312 for seeking dismissal of the writ petition in view of the existence of an alternate efficacious remedy.