Service Tax – Appeal against Tribunal’s Order on Taxability of Service – Appeal lies to Supreme Court: Delhi High Court
The Tribunal held that when the service is provided by a club to its members, it does not attract service tax. Where does an appeal lie against such a decision of the CESTAT? The Revenue appealed to the High Court.
The High Court observed,
Where order passed by the appellate tribunal relates to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purpose of assessment, the aggrieved party is to approach the Supreme Court directly by filing appeal under Section 35L(b). This is made clear even by the provisions of Section 35G which provides for appeal to the High Court, as it specifically excludes the orders relating, among other things, determination of any question having relation to the rate of duty of excise or to the value of goods for the purpose of assessment.
The Supreme Court in the case of Navin Chemicals Mfg. & Trading Co. Ltd. v. Collector of Customs – (2002-TIOL-460-SC-CUS) had an occasion to deal with the expression “determination of any question having a relation to the rate of duty of customs or to the value of goods for the purposes of assessment”. Though that was a case under the Customs Act, the provisions of the Central Excise Act were also taken note of, which are in pari materia with that of the Customs Act. The Apex Court specifically took note of sub-section (5) to Section 129D of the Customs Act and noted that this provision was simultaneously introduced in the Customs Act as well as the Central Excise Act by Custom and Central Excise Laws (Amendment) Act, 1988. Thus, Section 129D(5) is identical to Section 35E(5) of the present Act.
It is clear that determination of any question in relation to rate of duty or to the value of goods for the purpose of assessment and when it is decided by the CESTAT, appeal there against is provided to the Supreme Court under Section 35L(b) and no such appeal is permissible to the High Court.
It would be of interest to note at this stage that in the case of Perfect Electric Concern Pvt. Ltd. v. Asst. Collector / Commissioner, Central Excise, – a writ petition was filed against such an order without availing the statutory remedy of appeal to the Supreme Court provided under Section 35D of the Act. Argument by the petitioner therein, based on the judgment of the Supreme Court in L. Chandra Kumar v. Union of India, – (2002-TIOL-159-SC-CB) was that the remedy of writ was always available. This contention was turned down and writ petition was dismissed by this Court observing that the judgment in L.Chandra Kumar nowhere suggests that the petitioner should file petitions under Articles 226/227 of the Constitution of India even bypassing the statutory remedy of an appeal to the Supreme Court provided by an enactment. In this backdrop, it cannot be disputed that if the question of determination relates to the rate of duty or excise or the value of goods “for the purposes of assessment”, appeal lies to the Supreme Court.
It also cannot be disputed that in the present case that the question of rate of duty of service tax for the purpose of assessment arose for consideration and has been decided and, therefore, normally an appeal to this Court would not be maintainable.
Appeal provision is Section 35G, under which these appeals are filed. Therefore, that provision, along with Section 35L, is to be considered (as already done) to decide the issue of maintainability. As is clear from the order of the Appellate Tribunal, in essence, the question that is decided relates to rate of duty. Whether nomenclature thereof is given as service tax, it is the rate of duty of that tax which would essentially fall for consideration. Against such a decision, appeal is filed by the appellant under Section 35G of the Act which would not be maintainable in view of the decision of the Supreme Court in Naveen Chemicals.
The remedy for the appellant is to file appeal under Section 35L of the Act, which lies to the Supreme Court.
The appeals are not maintainable for want of jurisdiction and are, thus, dismissed on this ground.
