Appeals against CESTAT orders on pipeline goods transportation service-tax not maintainable; Sections 35G(1) and 35L remove jurisdiction

The HC held the appeals against CESTAT orders challenging service-tax liability on transportation of goods by pipeline are not maintainable, as the core issue relates to rate of duty/taxability under Sections 35G(1) and 35L of the Central Excise Act. Subsection (2) of Section 35L brings taxability/excisability within "rate of duty" matters, placing such disputes outside HC jurisdiction and permitting appeal only to the SC. Accordingly, the appeals were dismissed for lack of jurisdiction.

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Issues Involved:
1. Maintainability of appeals before the High Court.
2. Determination of taxability of services.

Summary:

1. Maintainability of Appeals:
The respondent raised a preliminary objection regarding the maintainability of the appeals under Sections 35G and 35L of the Central Excise Act, 1944. The respondent argued that appeals involving the determination of taxability should be directed to the Supreme Court, not the High Court. They relied on precedents from the Madras, Calcutta, and Bombay High Courts, which held that such issues fall under the jurisdiction of the Supreme Court.

The appellant, represented by Mr. S.C. Keyal, contended that the appeals did not involve issues related to the rate of duty of excise or the value of goods for assessment purposes, and thus, should be heard by the High Court. He proposed a substantial question of law regarding the assessee's liability to pay service tax on the transportation of goods by pipeline service.

The court analyzed the statutory provisions and precedents, concluding that the core issue pertains to the determination of the rate of duty of excise (service tax) or the value of goods for assessment purposes. This falls within the exceptions outlined in Section 35G(1) read with Section 35L(1) of the 1944 Act, thus barring the High Court from entertaining the appeals.

2. Determination of Taxability:
The court cited the Full Bench judgment of the Bombay High Court in Commissioner Central Excise, Mumbai-V -Vs- Reliance Media Works Limited, which held that issues of excisability/taxability are related to the rate of duty and should be appealed to the Supreme Court. The court agreed with this interpretation, noting that the determination of taxability is integral to the assessment process and has an all-India impact, necessitating uniformity in decisions.

The court concluded that the appeals against the CESTAT, Kolkata's order are barred by Section 35G(1) read with Section 35L of the 1944 Act. The appeals were dismissed as not maintainable, and the revenue was advised to file appeals before the Supreme Court if desired.

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