2024 (12) TMI 1456 - HC - Service Tax

Appeal dismissed for lack of jurisdiction as taxability disputes under Section 35L require Supreme Court filing

The Delhi HC dismissed an appeal regarding service tax taxability, ruling it lacked jurisdiction. The court held that under Section 35L of the Central ... Maintainability of the present appeal before the Court - appropriate forum - taxability - appeal ought to be preferred before the Supreme Court or not - HELD THAT:- Since the issue is one of taxability, the decision of CESTAT would have to be assailed before the Supreme Court in view of Section 35L of the Central Excise Tax as the question of law involved is regarding the taxability of the said service. This is the settled position in law as per a series of decisions including a recent order of this bench in Commissioner of CGST and Central Excise, Delhi v. M/s Spicejet Ltd. [2024 (12) TMI 1408 - DELHI HIGH COURT]. This Court dismissing a similar appeal preferred under Section 35G, from the decision of CESTAT observed 'In view of Sections 35G and 35L of the Central Excise Act, 1944 which applies in respect of Service Tax, whenever issues of determining taxability are involved, the appeal would lie to the Supreme Court.' The present appeal is rejected with liberty to avail remedies under Section 35L of the Central Excise Act, 1944 in accordance with law. Needless to state that the Appellant is free to claim benefit under Section 14 of the Limitation Act, 1963 for the period during which the present appeal was pending before this court - Appeal disposed off. Issues Involved:1. Taxability of services rendered by the Respondent-Assessee under the Finance Act, 1994.2. Jurisdiction of the High Court to entertain the appeal under Section 35G of the Central Excise Act, 1944.Issue-wise Detailed Analysis:1. Taxability of Services:The primary issue in the case was whether the services provided by the Respondent-Assessee constituted 'commercial or industrial construction service' as defined under Section 65(25b) of the Finance Act, 1994, which is taxable under Section 65(105) of the same Act. The Directorate General of Central Intelligence had issued a Show Cause Notice demanding service tax on these grounds. However, the Respondent contended that the services were part of composite work contracts involving both goods and services, thus qualifying as 'works contract' as per the Supreme Court's judgment in Commissioner of Central Excise vs. Larsen and Toubro Ltd. The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) accepted this argument, setting aside the original order imposing the service tax.2. Jurisdiction of the High Court:The secondary issue was whether the High Court had the jurisdiction to entertain the appeal under Section 35G of the Central Excise Act, 1944. The Respondent's counsel argued that the appeal involved a question of taxability, which should be directly appealed to the Supreme Court as per Section 35L of the Central Excise Act. The High Court agreed with this position, citing previous decisions that clarified that appeals involving the determination of taxability or valuation should be directed to the Supreme Court. The Court emphasized that the nature of the order passed by CESTAT, rather than the issues raised in the appeal, determines the jurisdiction. Since the impugned order related to the determination of the value of taxable services, the appeal was deemed not maintainable in the High Court.In conclusion, the High Court dismissed the appeal as not maintainable, granting the Appellant the liberty to pursue remedies under Section 35L of the Central Excise Act, 1944, and potentially benefit from Section 14 of the Limitation Act, 1963, for the duration the appeal was pending before the Court.