IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (CENTRAL EXCISE)

ORIGINAL SIDE BEFORE:

THE HON’BLE JUSTICE RAJARSHI BHARADWAJ AND THE HON’BLE JUSTICE UDAY KUMAR OCOT 6 OF 2025 COMMISSIONER OF SERVICE TAX, KOLKATA VS.

M/S. MSTC LIMITED For the Appellant : Mr. B.P. Banerjee, Ld. Adv.

Mr. K. K. Maiti, Ld. Adv.

For the Respondent : Mr. Vinay Shraff, Ld. Adv.

Mr. Dev Agarwal, Ld. Adv.

Hearing concluded on : 27.01.2026 Judgment on : 11.02.2026 Uday Kumar, J:-

1. This appeal, preferred by the Revenue under Section 35G of the Central Excise Act, 1944, is directed against the judgment and order dated August 6, 2024, passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, in Final Order No. 76625/2024.

2. The procedural history of the present matter necessitates a brief clarification. Initially, acting upon a report from the Registry, a notice regarding an alleged delay in filing was served upon the Respondent on February 19, 2025. However, subsequent verification revealed that the Registry had erroneously computed a delay of 57 days by applying a 120-day limitation period. Inasmuch as Section 35G explicitly mandates a 180-day window for filing such appeals, this Court, by an order dated March 19, 2025, rectified the said error. Consequently, the appeal was held to have been filed within the statutory period, and no application for condonation of delay remains pending.

3. In the interim, the Respondent sought leave to file a Memorandum of Cross-Objection, accompanied by an application for condonation of delay (GA 1 of 2025). Upon this Court condoning the delay of 124 days by an order dated October 28, 2025, the Cross-Objection was formally taken on record and numbered as OCOT 6 of 2025.

4. When the matter was taken up for the Hearing on Admission on January

27, 2026, the learned Counsel for the Respondent/Cross-Objector raised a preliminary submission, asserting that the Cross-Objection ought to be heard and decided in the first instance. The Respondent contended that by virtue of Order 41 Rule 22 of the Code of Civil Procedure— applicable to these proceedings via the statutory conduit of Section 35G(9) of the Act—they possessed an inherent right to challenge adverse findings on the merits of taxability, notwithstanding that the final decree of the Tribunal was in their favour.

5. The gravamen of the Respondent’s argument was that they were aggrieved by the Tribunal's specific finding that the 1% mark-up on High Sea Sales constitutes a taxable service. It was submitted that such a finding, if allowed to attain finality, would entail grave fiscal consequences for the Respondent in subsequent assessment years. In support of the prayer for immediate adjudication, the Respondent placed heavy reliance upon the ratios in Hardevinder Singh v. Paramjit Singh (2013) 9 SCC 261, Mahant Dhangir v. Madan Mohan (1987) 1 SCC 5, and Venture Global Engineering v. Satyam Computer Services Ltd. (2008) 1 SCC 494.

6. We have considered the rival submissions at length, yet we find ourselves unable to subscribe to the procedural course suggested by the Respondent. The architecture of a statutory appeal under Section 35G is uniquely structured and admits of no ambiguity. An appeal under this section is a restricted one; it’s very maintainability is contingent upon the Court’s satisfaction that a "substantial question of law" is involved. Until this Court applies its judicial mind and formally admits the appeal by framing such questions, the proceedings remain at an embryonic stage.

7. In any event, a Cross-Objection is, in pith and substance, a derivative right—an appendage to a validly admitted appeal. The stage for pressing such an objection matures only after the main appeal has crossed the hurdle of admission and the Court has directed notice to the Respondent for a hearing on the merits. To permit a hearing on a Cross- Objection before the main appeal is even admitted would be to adjudicate the merits of a dispute befo