2015 (3) TMI 1325 - HC - Service Tax

Maintainability of appeal before High Court - sub-section (2) of Section 35 of the Central Excise Act 1944 - Classification of service - services rendered to Oil and Natural Gas Commission during the period of 1st May 2008 to June 2010 - contention of the Revenue that the case involves classification of the services provided by the Appellant to his clients and in view of sub-section (2) of Section 35 of the Central Excise Act 1944 the appeal against the order impugned would lie before the Apex Court and not this Court. Held that - In the present case the substantial questions of law with regard to interpretation of subsection (zzzzj) of Section 65(105) arises for consideration - in the present case no question which has a relation to the rate of duty excise or service tax is involved. As such the Appeal would be very much tenable before this Court. Appeal admitted.

Summary

Issues:
1. Tenability of the Appeal before the High Court regarding classification of services under the Central Excise Act, 1944.

Detailed Analysis:
The Revenue raised a preliminary objection regarding the tenability of the Appeal before the High Court, arguing that the case involved the classification of services provided by the Appellant to clients. The Revenue contended that, as per sub-section (2) of Section 35 of the Central Excise Act, 1944, the appeal against the impugned order should lie before the Apex Court and not the High Court. The Appellant received a show cause notice regarding the classification of services provided to Oil and Natural Gas Commission under a specific section of the Finance Act, 1994 dealing with service tax. The Commissioner's order classified the services under the mentioned section and imposed duty and penalties. The Appellant, aggrieved by this decision, appealed to the CESTAT, which upheld the original order, leading to the current Appeal before the High Court.

The Appellant, represented by learned senior counsel Mr. Sridharan, argued that the Appeal involved a substantial question of law concerning the interpretation of the relevant section of the Finance Act, 1994. On the other hand, Mr. Kantharia, representing the Revenue, raised a preliminary objection stating that the Appeal should be filed before the Supreme Court of India and not the High Court, citing specific sections of the Central Excise Act, 1944. The relevant sections mentioned outlined the conditions under which an appeal could be made to the High Court and the scope of questions related to the rate of duty or taxability of goods for assessment purposes.

The High Court analyzed the provisions of the Central Excise Act, 1944, specifically sub-sections (1) of Section 35-G and (2) of Section 35-L. The Court noted that an appeal could be made to the High Court if it involved a substantial question of law, except when related to the rate of duty or value of goods for assessment purposes. The Court observed that the issue in the present case was not about the rate of duty but rather the classification of services under a specific section of the Finance Act, 1994. The Court highlighted that the Revenue's argument would be valid if the issue involved a comparison between different entries with different duty rates, which was not the case here.

The Court referred to a similar case involving the Revenue and emphasized that the present Appeal raised substantial questions of law regarding the interpretation of the relevant section of the Act. The Court concluded that the Appeal was tenable before the High Court as it did not involve questions related to the rate of duty or service tax. Therefore, the objection raised by the Revenue regarding the tenability of the Appeal before the High Court was rejected. The Court admitted the Appeal based on the substantial questions of law raised in the grounds specified.