Taxability of "franchisee service" under excise law-appeal u/s35H held not maintainable; only s.35L route applies.

The dominant issue was whether an appeal to the HC under s.35H of the Central Excise Act, 1944 was maintainable when the Tribunal order turned on taxability of "franchisee service." Relying on s.35L(2), which deems questions "relating to the rate of duty" to include determination of taxability/excisability for assessment, and on the Full Bench ruling holding the s.35L(2) amendment clarificatory with retrospective effect, the HC held that such matters fall within s.35L and are appealable only to the SC. Consequently, the appeals were held not maintainable before the HC.

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Issues Involved:
1. Taxability of services under the agreement.
2. Classification of the appellant as a 'Franchisee'.
3. Applicability of Export of Services Rules, 2005.
4. Maintainability of the appeals before the High Court.

Summary:

1. Taxability of Services Under the Agreement:
The appeals stem from a common order dated 10th December 2018 by the CESTAT, Mumbai, which upheld the Order-in-Original confirming the demand for service tax against the appellant. The service tax was levied on services under agreements dated 21st January 2008 and 25th March 2009, where the appellant awarded media rights to MSM Satellite (Singapore) Pte. Ltd. and World Sport Group (India) Pvt. Ltd.

2. Classification of the Appellant as a 'Franchisee':
Show cause notices were issued for various financial years, classifying the appellant as a "˜Franchisee' under Section 65 (47) of Chapter V of the Finance Act, 1994, for services rendered to MSM Satellite (Singapore) related to the telecast of IPL Cricket matches.

3. Applicability of Export of Services Rules, 2005:
The appellant argued that the services were non-taxable as they were transactions of "export of service" under the Export of Services Rules, 2005, including the amended Rule 3 (1) effective from 27th February 2010. The Tribunal rejected this contention, holding that the transaction was not an export of service.

4. Maintainability of the Appeals Before the High Court:
The respondent raised a preliminary objection to the maintainability of the appeals, citing Sections 35H and 35L of the Central Excise Act, 1944, as applicable to service tax. The court noted that appeals involving the determination of taxability should be presented to the Supreme Court. The court referred to past decisions, including the Full Bench decision in Commissioner of Central Excise, Mumbai-V Commissionerate Vs. M/s. Reliance Media Works Ltd., which clarified that appeals on taxability or excisability issues are within the Supreme Court's jurisdiction. Consequently, the High Court concluded that the appellant should approach the Supreme Court for relief. The appeals were disposed of, permitting the appellant to present them before the Supreme Court, with all contentions expressly kept open.

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