2021 (2) TMI 1167 - HC - Service Tax

Maintainability of appeal - Appropriate forum - question of law or question of facts involved - HELD THAT - The subject matter of this appeal has something to do with the classification of services. This appeal should have been filed before the Hon'ble the Supreme Court under Section 35L of the Act, 1944. This tax appeal on the ground that the same is not maintainable before this High Court.

Summary

Issues:
1. Jurisdiction of the High Court under Section 35G of the Central Excise Act, 1944
2. Classification of services for tax appeal
3. Maintainability of the tax appeal before the High Court

Jurisdiction of the High Court under Section 35G of the Central Excise Act, 1944:
The High Court addressed the issue of jurisdiction under Section 35G of the Central Excise Act, 1944. The tax appeal was filed by the Revenue against an order passed by the Customs Excise Services Tax Appellate Tribunal. The Court noted that the subject matter of the appeal related to the classification of services, which should have been brought before the Supreme Court under Section 35L of the Act. Consequently, the High Court held that the tax appeal was not maintainable before them due to lack of jurisdiction. The Revenue was directed to take appropriate legal steps in accordance with the law.

Classification of services for tax appeal:
The primary issue in the tax appeal was the classification of services. The Revenue raised several questions of law for the Court's consideration, including the acceptance of an agreement dated 28.05.2005, the validity of created documents, the Tribunal's reasoning, the nature of the respondent's activities, and the eligibility for exemption under notification No.8/2005-ST. The Court highlighted concerns regarding the Tribunal's findings, the evidentiary support for service tax evasion allegations, and the characterization of the respondent's activities as job work. These issues underscored the complexity of determining the correct classification of services for tax purposes.

Maintainability of the tax appeal before the High Court:
The High Court emphasized the importance of adhering to the appropriate legal procedures and jurisdictional requirements in tax appeals. Despite the Revenue's arguments and the questions of law raised, the Court concluded that the tax appeal should have been filed before the Supreme Court under Section 35L of the Act, given the nature of the issues related to service classification. As a result, the High Court disposed of the appeal, declaring it not maintainable before them and directing the Revenue to pursue the matter through the appropriate legal channels. This decision highlighted the significance of jurisdictional rules in tax matters and the need for parties to follow the prescribed legal procedures for effective resolution.