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2025 (5) TMI 652 - HC - Service TaxMaintainability of the present appeal in view of Section 35G and 35L of the Central Excise Act 1944 which applies in respect of service tax cases as well - Levy of service tax - transfer of development rights - time limitation - HELD THAT - This Court had an occasion to consider a similar matter in Commissioner of CGST and Central Excise Delhi South v. M/s Spicejet Ltd. 2024 (12) TMI 1408 - DELHI HIGH COURT wherein this Court held that In view of the above decisions and considering the nature of issues that have been decided vide the order dated 31st March 2016 passed by the Commissioner of Service Tax as also the impugned order of the CESTAT dated 3rd July 2023 this Court is of the opinion that an appeal against the said impugned order would lie in terms of Section 35L of the Central Excise Act 1944 to the Hon ble Supreme Court. The present appeal would not be maintainable before this Court. Accordingly the appeal is dismissed with liberty to the Appellant to approach the Hon ble Supreme Court - In the facts and circumstances of this case time to file the appeal is extended till 15th July 2025.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Liability of Transfer of Development Rights for Service Tax The original order (Order-in-Original no. 27/PP/COMMR./CGST/AUDIT-II/2017-18 dated 28th March 2018) held that the transfer of development rights does not attract service tax. This finding was challenged by the Revenue Department but was rejected on the ground of limitation. The present appeal does not directly re-examine this substantive question but is premised on challenging the limitation ruling. The Court did not delve into the substantive merits of whether transfer of development rights is taxable, as the impugned order primarily concerned limitation. However, the background indicates that the original authority had ruled against service tax liability on such transfer, and the Revenue's challenge was time-barred. Issue 2: Maintainability of the Appeal under Section 35G and 35L of the Central Excise Act, 1944 The Court examined the provisions of Section 35G and 35L of the Central Excise Act, which govern the appellate jurisdiction in service tax matters. Section 35G provides for appeals to the High Court from orders of the Customs Excise and Service Tax Appellate Tribunal (CESTAT), while Section 35L restricts appeals in certain cases to the Supreme Court. The Respondent contended that the appeal was not maintainable before the High Court because the impugned order involved issues already decided or falling within the exclusive jurisdiction of the Supreme Court under Section 35L. The Court relied heavily on its earlier decision in a similar matter (SERTA 2/2024), where it had analyzed the scope of appeals under these provisions. The Court referred to precedents including:
In those decisions, the Court emphasized that where the impugned order deals with issues such as CENVAT credit, penalty imposition, or other substantive service tax questions, appeals lie only before the Supreme Court and not the High Court. Even if the CESTAT's order primarily addresses limitation, the nature of the original order must be considered to determine the correct appellate forum. Applying this reasoning, the Court held that the present appeal was not maintainable before it, since the impugned order arose from a substantive order passed by the Commissioner concerning service tax liability and related issues. The appeal against such an order lies before the Supreme Court under Section 35L, not the High Court under Section 35G. Issue 3: Application of Limitation and Extension of Time The impugned order was challenged on the ground that the Revenue's appeal was barred by limitation. The Court noted that the CESTAT had rejected the Revenue's appeal on limitation grounds. While dismissing the present appeal as not maintainable, the Court clarified that the dismissal would not preclude the Revenue from seeking remedies available under law, including invoking Section 14 of the Limitation Act, 1963, to condone delay for the period during which the appeal was pending before the High Court. Further, the Court granted an extension of time to file the appeal before the Supreme Court till 15th July 2025, recognizing the request made by the Revenue's counsel. 3. SIGNIFICANT HOLDINGS The Court held: "Even in the present case, though CESTAT has only considered the issue of limitation and the said issue was framed for consideration vide order dated 23rd January, 2024, the nature of the order, which is appealed, has to be considered." "Merely because CESTAT has only considered the issue of limitation, the present appeal cannot be filed in the High Court." "In view of the above decisions and considering the nature of issues that have been decided vide the order dated 31st March, 2016, passed by the Commissioner of Service Tax as also the impugned order of the CESTAT dated 3rd July, 2023, this Court is of the opinion that an appeal against the said impugned order would lie, in terms of Section 35L of the Central Excise Act, 1944, to the Hon'ble Supreme Court." "Therefore, the present appeal is dismissed as not maintainable." "Needless to state that the dismissal of the present appeal would not preclude the Appellant from availing such remedies as may be available in accordance with law and seeking benefit under Section 14 of the Limitation Act, 1963, for the period during which the present appeal was pending before this Court." Core principles established include:
Final determinations:
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