Facts of the Case

The present appeal was filed by the Revenue challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The dispute primarily related to taxability of services and whether such issues could be adjudicated by the High Court under Section 35G of the Central Excise Act, 1944.

The respondent raised a preliminary objection regarding the maintainability of the appeal, contending that matters relating to taxability fall outside the jurisdiction of the High Court and lie exclusively before the Supreme Court. 

Issues Involved

  1. Whether an appeal involving questions of service taxability is maintainable before the High Court under Section 35G of the Central Excise Act, 1944.
  2. Whether the appeal should instead be filed before the Supreme Court under Section 35L. 

Petitioner’s Arguments

  • The Revenue contended that the CESTAT order was passed in ignorance of statutory provisions.
  • It was argued that the respondent could not claim exemption or protection under the law due to amendments in Section 65B(26A) of the Finance Act, 1994.
  • Therefore, the appeal was maintainable before the High Court. 

Respondent’s Arguments

  • The respondent raised a preliminary objection to maintainability.
  • It was argued that:
    • The issue relates to taxability, which falls outside the jurisdiction of the High Court under Section 35G.
    • The appropriate remedy lies before the Supreme Court under Section 35L.
  • Reliance was placed on earlier judgments including:
    • Commissioner of Service Tax Delhi v. M/s Konark Exim Pvt. Ltd.
    • Commissioner of CGST v. SpiceJet Ltd. 

Court’s Findings / Order

  • The Delhi High Court upheld the preliminary objection raised by the respondent.
  • It held that:
    • Issues concerning taxability of services are not maintainable before the High Court under Section 35G.
    • The proper appellate forum is the Supreme Court under Section 35L.
  • Accordingly, the appeal was dismissed as not maintainable. 

Important Clarification by the Court

  • The Court clarified that:
    • It has not examined the merits of the case.
    • Liberty is granted to the appellant to approach the Supreme Court.
    • The appellant may also seek condonation of delay, considering time spent before the High Court.

Link to download the order -   https://delhihighcourt.nic.in/app/showFileJudgment/74826022026SERTA32026_155746.pdf  

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