2023 (8) TMI 543 - HC - Service Tax

Maintainability of appeal - appeal to Supreme Court (appropriate Forum) - Section 35H and 35L of the Central Excise Act, 1944 - Determination of taxability - Franchisee service - whether in relation to services in question, any tax can at all be levied under the provisions in question? - HELD THAT - Sub-section (2) of Section 35L, itself clarifies that for the purpose of Chapter VI-A, the determination of any question having a relation to the rate of duty, shall include the determination of taxability or excisability of goods for the purpose of assessment. A Full Bench of this Court in case of Commissioner of Central Excise, Mumbai-V Commissionerate Vs. M/s. Reliance Media Works Ltd. 2019 (12) TMI 392 - BOMBAY HIGH COURT also dealt with such issue that the appeals which arises from the orders of the Tribunal which relate to taxability or excisability passed prior to 6 August, 2014, i.e., the date on which Section 35L(2) of the 1944 Act, came to be inserted, being an issue on rate of duty, would be appealable only before the Supreme Court and not before the High Court. The Full Bench also held that the amendment made to Section 35L of the Act was clarificatory in nature and, had a retrospective in operation. Even otherwise Section 35H of the 1944 Act which provides for an appeal to the High Court, clearly carves out an exception in regard to exclusion of matters not relating, amongst other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment, which is now the legislative clarification as provided by an amendment as incorporated to Section 35L by insertion of sub-section (2), which is a clarification in relation to the entire Chapter in question namely Chapter VI-A dealing with the Appeals. The present appeals raise an issue on the taxability of the services in question, hence these appeals are not maintainable before this Court.

Summary

Issues Involved:
1. Taxability of services under the agreement.
2. Classification of the appellant as a 'Franchisee'.
3. Applicability of Export of Services Rules, 2005.
4. Maintainability of the appeals before the High Court.

Summary:

1. Taxability of Services Under the Agreement:
The appeals stem from a common order dated 10th December 2018 by the CESTAT, Mumbai, which upheld the Order-in-Original confirming the demand for service tax against the appellant. The service tax was levied on services under agreements dated 21st January 2008 and 25th March 2009, where the appellant awarded media rights to MSM Satellite (Singapore) Pte. Ltd. and World Sport Group (India) Pvt. Ltd.

2. Classification of the Appellant as a 'Franchisee':
Show cause notices were issued for various financial years, classifying the appellant as a "˜Franchisee' under Section 65 (47) of Chapter V of the Finance Act, 1994, for services rendered to MSM Satellite (Singapore) related to the telecast of IPL Cricket matches.

3. Applicability of Export of Services Rules, 2005:
The appellant argued that the services were non-taxable as they were transactions of "export of service"� under the Export of Services Rules, 2005, including the amended Rule 3 (1) effective from 27th February 2010. The Tribunal rejected this contention, holding that the transaction was not an export of service.

4. Maintainability of the Appeals Before the High Court:
The respondent raised a preliminary objection to the maintainability of the appeals, citing Sections 35H and 35L of the Central Excise Act, 1944, as applicable to service tax. The court noted that appeals involving the determination of taxability should be presented to the Supreme Court. The court referred to past decisions, including the Full Bench decision in Commissioner of Central Excise, Mumbai-V Commissionerate Vs. M/s. Reliance Media Works Ltd., which clarified that appeals on taxability or excisability issues are within the Supreme Court's jurisdiction. Consequently, the High Court concluded that the appellant should approach the Supreme Court for relief. The appeals were disposed of, permitting the appellant to present them before the Supreme Court, with all contentions expressly kept open.