COMMISSIONER OF SERVICE TAX Vs. MENON ASSOCIATES

JUDGEMENT

(1.) The Commissioner of Service Tax has filed the present appeal under Section 83 of the Finance Act, 1994 read with Section 35G of the Central Excise Act, 1944 against order dated 2nd January, 2014 passed in appeal No.ST/1402/2011 by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT, for short).

(2.) Decisions of the CESTAT can be challenged under Section 35G the Central Excise Act, 1944 before the jurisdictional High Court and before the Supreme Court under Section 35L of the Central Excise Act, 1944, but the Supreme Court and the jurisdictional High Court do not enjoy concurrent appellate jurisdiction. Section 35L of the Central Excise Act, 1944 in clause (b) to sub-section (1) states that an appeal shall lie before the Supreme Court against any order passed by CESTAT relating to among other things, determination of any question having a relation to rate of duty/tax or value of goods/services for the purpose of assessment. Subsection (2) to Section 35L inserted by Finance (No. 2) Act of 2014 with effect from 6th August, 2014 states that for the purpose of the said Chapter, determination of any question having a relation to rate of duty/tax shall include determination of taxability or exigibility of goods to tax. In the case of service tax adjudication, it means that the question/issue of chargeability of service to tax under the Finance Act, 1994 read with the relevant provisions, notification or exemptions, is amenable to challenge under Section 83 of the Finance Act, 1994 read with Section 35L of the Central Excise Act, 1944 before the Supreme Court.

(3.) Appeal under Section 83 of the Finance Act, 1994 read with Section 35G of the Central Excise Act, 1944 would lie to the High Court only when the order determines issues other than any questions relating to the rate of duty or value of goods or services for the purposes of assessment. Thus, if the order determine any question relating to the rate of duty/tax or value of goods or services along with other questions, the appeal is maintainable only under Section 35L of the Central Excise Act, 1944, before the Supreme Court and not before the jurisdictional High Court. This Court in Commissioner of Income Tax versus Ernst and Young Pvt Ltd, 2014 34 STR 3Delhi, has held that any question having relation to rate of duty would include determination of taxability or levy of tax on a particular service even prior to the amendment by the Finance Act (No.2), 2014. Further, the determination of the question/issue in the order-inoriginal would decide the appellate forum under Section 35L or 35G of the Central Excise Act, 1944, as any other interpretation would lead to incongruous or unacceptable results. The orders of the Tribunal, which do not relate to the merits of the decisions of the order-in-original, or "interim" orders like pre-deposits, etc may be treated differently. The present appeal is not one such case.