Writ jurisdiction declined for service tax dispute on VAS transactions; petitioner directed to pursue appeal before CESTAT with deposit condition.

Whether service tax was payable on VAS transactions through prepaid credit was treated as a factual issue requiring examination of how the services were provided and charged. Because the impugned order was appealable, writ jurisdiction was declined and the petitioner was relegated to the appellate remedy before CESTAT. Liberty to file the appeal was preserved on deposit of Rs. 1 crore within four weeks, and the appeal was to be entertained without rejection on limitation if filed within the stipulated time.

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Issues: Whether the challenge to the order confirming service tax demand on VAS transactions could be adjudicated in writ proceedings, and whether the petitioner should be relegated to the appellate remedy before CESTAT subject to a deposit condition.

Analysis: The dispute as to whether service tax was payable on the second occasion when value-added services were availed through prepaid credit was treated as a factual issue requiring examination of the manner in which the services were provided and charged. As the impugned order was appealable, the matter was considered fit to be pursued before CESTAT rather than in writ jurisdiction. Liberty to file the appeal was preserved on compliance with a deposit of Rs. 1 crore, and the appeal was directed not to be rejected on limitation if filed within the stipulated time.

Outcome: The petition was disposed of by relegating the petitioner to the appellate remedy before CESTAT, subject to deposit of Rs. 1 crore within four weeks.

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