Delhi East Archives

Appeal Against CESTAT Order Determining Taxability of Service Lies to Supreme Court Under Section 35L

Issue

Whether an appeal against a final order of CESTAT determining the taxability of a service is maintainable before the High Court under Section 35G or lies exclusively before the Supreme Court under Section 35L of the Central Excise Act, 1944.

Facts

Appellate Challenge: An appeal was filed under Section 35G of the Central Excise Act, 1944, before the High Court against a final order of the CESTAT in cross service tax appeals between the parties.
Core Subject Matter: The primary issue determined by the CESTAT in the impugned order related to the taxability of a service.
Precedent Relied Upon by Appellant: The appellant cited the Allahabad High Court decision in NKG Infrastructure Ltd. v. Commissioner of Customs, Central Excise & Service Tax (All) to support the maintainability of the appeal before the High Court.
Judicial Observation on Precedent: The Court observed that in the cited NKG Infrastructure decision, the specific issue of maintainability was neither raised nor decided, rendering it inapposite.
Failure to Demonstrate Exemption: The appellant failed to produce any statutory provision or binding precedent to show why an exception to the established jurisdictional rule should be made.

Decision

The High Court held that where the CESTAT determines the taxability of a service, an appeal against such an order lies exclusively before the Supreme Court under Section 35L.
The maintainability issue stood concluded against the appellant in alignment with binding Division Bench precedent.
Consequently, the appeal was held not maintainable before the High Court, and the appellant was relegated to pursue the statutory remedy before the Supreme Court under Section 35L.

Key Takeaways

Exclusive Supreme Court Jurisdiction: Under Section 35L of the Central Excise Act, 1944, any order of the CESTAT determining the rate of duty or the taxability/classification of a service falls exclusively within the appellate jurisdiction of the Supreme Court.
Bar on High Court Jurisdiction: High Courts cannot entertain appeals under Section 35G when the core dispute revolves around taxability or rate of duty determination.
Distinction on Sub Silentio Precedents: Judgments where maintainability was not explicitly raised, contested, or decided do not constitute binding precedent on the issue of jurisdiction.

HIGH COURT OF DELHI

Commissioner of Central Tax, CGST, Delhi East

Samiah International Builder (P.) Ltd.

ANIL KSHETRAPAL and Ms. SHAIL JAIN, JJ.

CEAC No. 5 of 2024
CM APPL. No. 50039 of 2024

JULY 28, 2026

Ms. Navruti Ojha, Adv. and Shubham Tyagi, SSC for the Petitioner. Prabhat Kumar, Ms. Ekta Kumari, Samarth, Rakesh Kumar, Ms. Ritika Verma and R.P. Singh, Advs. for the Respondent.

ORDER

1. The present Appeal has been filed under Section 35G of the Central Excise Act, 1944, as made applicable to service tax matters under the Finance Act, 1994, read with Section 174 of the Central Goods and Services Tax Act, 2017, inter alia, assailing the Final Order No. ST/A/51686-51687/2023-ST(DB) dated 22.12.2023 passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi, in Service Tax Appeal No. ST/55788/2014 filed by the Respondent and Service Tax Appeal No. ST/55922/2014 filed by the Revenue, arising out of Order-in-Original No. 20/2016-ST dated 06.12.2016 passed by the Commissioner of Central Excise, Delhi-III, Gurgaon.

2. The maintainability of the present Appeal before this Court is disputed by the learned counsel appearing for the Respondent. It is contended that the expression “determination of any question having a relation to the rate of duty of excise”, occurring in Section 35L of the Central Excise Act, 1944, is wide enough to encompass the question of taxability of a particular service. In support of the said contention, reliance is placed upon the judgment of the Division Bench of this Court in Commissioner of Central Tax, CGST v. JMD Ltd [2024 SCC OnLine Del 9141].

3. Learned counsel appearing for the Appellant, on the other hand, submits that the Allahabad High Court, in Nkg Infrastructure Ltd. v. Commissioner of Customs, Central Excise & Service Tax (All), has held that an appeal before the High Court is maintainable where the taxability of a particular service is in dispute.

4. This Court has considered the submissions advanced by the learned counsel for the parties.

5. It is evident that the Division Bench of this Court has held that where the CESTAT determines the taxability of a particular service, an appeal against such determination would lie before the Hon’ble Supreme Court under Section 35L of the Central Excise Act, 1944, and not before the High Court. In arriving at the said conclusion, reliance has been placed uponCommissioner of CGST and Central Excise v. Spicejet Ltd [SERTA No. 2 of 2024, dated 5-12-2024].

6. A perusal of the judgment of the Allahabad High Court in Nkg Infrastructure Ltd. (supra) shows that only the questions framed therein were adjudicated. The issue of the maintainability of an appeal before the High Court was neither raised nor considered.

7. The learned counsel appearing for the Appellant has also failed to persuade this Court that the aforesaid decision of the Division Bench has overlooked any relevant statutory provision or binding precedent warranting a different view.

8. In view of the aforesaid, the present Appeal is held to be not maintainable before this Court. The Appellant is relegated to avail the appropriate statutory remedy before the Hon’ble Supreme Court under Section 35L of the Central Excise Act, 1944.

9. Accordingly, the present Appeal along with pending application (s) if any, stands disposed of.

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