Service tax classification disputes tied to rate of tax must proceed under the exclusive Supreme Court appellate route.

A classification dispute over whether the services constituted Technical Inspection and Certification Services or testing and analysis of software was treated as a question relating to the rate of service tax. On that basis, the High Court held that the appeal was barred under Section 35G and that the correct appellate route lay exclusively under Section 35L before the Supreme Court. The proceeding was therefore rejected for want of jurisdiction and could not be examined on merits, with liberty to pursue the remedy before the Supreme Court.

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Issues: Whether the appeal under Section 35G was maintainable when the dispute related to classification of services and, therefore, to a question having relation to the rate of service tax, attracting the appellate route under Section 35L.

Analysis: The dispute turned on whether the services rendered by the assessee fell under Technical Inspection and Certification Services or under testing and analysis of software. Such a question was one concerning the rate of duty/service tax and was excluded from the High Court's jurisdiction under Section 35G. The proper forum for adjudication of that question was the Apex Court under Section 35L.

Conclusion: The appeal was not maintainable before the High Court and could not be examined on merits.

Final Conclusion: The proceeding was rejected for want of jurisdiction, with liberty to pursue the remedy before the Supreme Court.

Ratio Decidendi: Where the issue in an excise or service tax appeal is a question relating to the rate of duty or tax, Section 35G is barred and the appeal lies exclusively under Section 35L.

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