2021 (12) TMI 1103 - HC - Service Tax

Maintainability of appeal before the HC - Levy of service tax on commission received in advance, debit card income, Renting of immovable property, services rendered by the Jammu and Kashmir Branch, and business auxiliary services - Recovery of CENVAT Credit with interest and penalty - CESTAT 2020 (2) TMI 1579 - CESTAT BANGALORE has set aside the demand - HELD THAT - In the light of the provisions and the judgment 2011 (4) TMI 500 - KARNATAKA HIGH COURT , it is clear that the order passed by the Appellate Tribunal relating to determination of any question having relation to the rate of service taxes which is nothing but taxability of services for the purpose of assessment would lie before the Hon ble Apex Court under Section 35L(b) of the Act and not to the High Court under Section 35G. The appeal is not maintainable under Section 35G before this Court. - Decided against the Revenue.

Issues:
1. Maintainability of the appeal under Section 35G of the Central Excise Act, 1944.
2. Taxability of services provided by the respondent.
3. Liability of the respondent to pay service tax on various services.
4. Admissibility of CENVAT credit with applicable interest and penalty.

Issue 1: Maintainability of the appeal under Section 35G:
The appeal was filed by the revenue under Section 35G of the Act challenging the order passed by the CESTAT. The primary objection raised by the respondent's counsel was regarding the maintainability of the appeal under Section 35G. The counsel argued that the taxability issue falls under the jurisdiction of the Hon'ble Apex Court under Section 35L of the Act. The court considered the provisions of Section 35G and Section 35L and observed that disputes related to taxability, excisability of goods, determination of taxable services, classification of services, and other similar issues do not fall within the jurisdiction of the High Court under Section 35G. Therefore, the court held that the appeal was not maintainable under Section 35G before the High Court.

Issue 2: Taxability of services provided by the respondent:
The respondent was registered for payment of service tax under various categories. The revenue alleged that the respondent wrongfully availed CENVAT credit without proper documentation and failed to pay service tax for services such as Banking and Financial Services, Business Auxiliary Services, Renting of Immovable Property Services, and Management Consultancy Services. The CESTAT held that the services utilized by the respondent had a nexus with the output services provided by them, and thus, the payment of service tax on debit card income, commission received in advance, and services rendered by branches in Jammu and Kashmir was not required. The revenue appealed against this decision.

Issue 3: Liability to pay service tax on various services:
The substantial questions of law raised by the revenue included whether the CESTAT order was non-speaking and liable to be set aside, whether the respondent was liable to pay service tax on commission received in advance, debit card income, Renting of Immovable Property, services by the Jammu and Kashmir Branch, and business auxiliary services, and whether the respondent was liable to pay the inadmissible amount of CENVAT credit with interest and penalty. The court did not address these questions due to the appeal's maintainability issue.

Issue 4: Admissibility of CENVAT credit with interest and penalty:
The revenue contended that the respondent had availed CENVAT credit without proper documentation and failed to pay service tax. The court did not delve into the issue of liability to pay the inadmissible amount of CENVAT credit with interest and penalty due to the appeal's maintainability concerns. The court dismissed the appeal, granting the revenue the liberty to raise the substantial questions of law before the Hon'ble Apex Court in accordance with the law.

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