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2025 Supreme(Online)(Del) 3284
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajneesh Kumar Gupta, J
COMMISSIONER OF SERVICE TAX DELHI II – Appellant
Versus
SHYAM SPECTRA PRIVATE LIMITED – Respondent
SERTA 5/2025
For the Appellants/Petitioners: Mr. Atul Tripathi, Mr.Gaurav ManiTripathi, Mr.Shubham Mishra
For the Respondents: Mr. J. K. Mittal, Ms. Vandana Mittal, Mr. Mukesh Choudhary
Issues of taxability and valuation of services must be resolved by the Supreme Court, not the High Court.
Headnote:(A) Central Excise Act, 1944 - Section 35G and 35L - Appeal filed challenging order of CESTAT, which allowed Respondent's appeal on the ground of limitation and set aside the Order-in-Original imposing service tax - Court determined the maintainability of appeal, ruling that since taxability and valuation were involved, the appeal lies to the Supreme Court. (Paras 2-18).
(B) The court reiterated that the determination of taxability is pertinent to jurisdiction and must be adjudicated at the higher level as per statutory provisions. (Paras 12-14)
Facts of the case:
Appellant contested a CESTAT ruling exempting an Internet Service Provider from service tax due to limitations in notice issuance - Respondent cited numerous judgments supporting their position.
Findings of Court:
The court found the impugned CESTAT order not appealable in the High Court due to nature of the order.
Issues: The primary issue was whether the appeal was maintainable in High Court given the involvement of taxation.
Ratio Decidendi: The court upheld that if taxability questions arise, the jurisdiction lies with the Supreme Court per existing legislation.
Result: Appeal dismissed as not maintainable.
| Table of Content |
|---|
| 1. appeal filed against cestat's order setting aside initial tax order based on limitation. (Para 2 , 3) |
| 2. arguments presented regarding maintainability of high court appeal versus supreme court appeal. (Para 4 , 6 , 7) |
| 3. court evaluated jurisdiction regarding taxability decisions and upheld statutory directives. (Para 8 , 12 , 14) |
| 4. ruling affirmed that appeals on tax valuation must go to the supreme court. (Para 15) |
JUSTICE
RAJNEESH KUMAR GUPTA
JUSTICE RAJNEESH KUMAR GUPTA
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
SERTA 5/2025 & CM APPL.30788/2025 (for recalling the order dated 24 th April, 2025)
2. The present appeal has been filed by the Appellant - Commissioner of Service Tax Delhi II under Section 35G of the Central Excise Act, 1944 , inter alia, challenging the final order bearing no.56196/2024 (hereinafter, ‘ impugned order’) of Customs Excise & Service Tax Appellate Tribunal, New Delhi (hereinafter, ‘CESTAT’) dated 31st July, 2024 passed in Service Tax Appeal No. 50583/2017 .
3. Vide the said impugned order, the CESTAT has allowed the appeal filed by the Respondent and has set aside the Order-in-Original bearing no.DLISVTAX002COM0441617 dated 30th December 2016 passed by the Office of the Commissioner of Service Tax, Delhi-II (hereinafter, ‘ Order-inOriginal’).
4. According to Mr. Tripathi, ld. Counsel for the Appellant, the CESTAT had allowed the appeal on the ground that the Show Cause Notice (hereinafter, ‘ SCN’) dated 19th October 2011 was barred by limitation.
5. In the present appeal, notice was issued vide order dated 24th April, 2025. Thereafter, an application i.e., the present application being CM APPL.30788/2025 , had been moved by the Respondent. The prayer in the present application reads as under:
“A) allow the present application by recalling the order dated 24.04.2025 passed by this Hon'ble court in SERTA 5 of 2025 and dismiss the present Appeal in SERTA 5 of 2025 filed by the Appellant/Revenue as not maintainable before this Hon'ble Court.
B) pass such further order(s) as this Hon’ble Court may deem just and proper in the facts and circumstances of the case.”
6. Mr. J. K. Mittal, ld. Counsel appearing on behalf of the Respondent submits that the present appeal is not maintainable before this Court as the issue of taxability would arise in this matter and, therefore, the appeal would lie under Section 35L of the Central Excise Act, 1944 to the Supreme Court. Ld. Counsel relies on the following decisions-
● Commissioner of Service Tax v. Ernst & Young Pvt Ltd., 2014(34) S.T.R. 3 (Del.),
● Sunshine Steel Industries v. Commissioner of CGST. Customs & Central Excise, Jodhpur (2023) 8 Centax 209 (Tri.-Del)
● Commissioner of Service Tax, New Delhi v. Menon Associates (CEAC No. 93/2014).
7. Mr. Tripathi, ld. Counsel for the Appellant submits that the CESTAT has merely adjudicated on the question as to whether the appeal was barred by limitation or not. According to Mr. Tripathi, ld. Counsel, since the CESTAT has not gone into the merits, the appeal against the impugned order would lie before this Court.
8. Heard. The issue, which arises in the present appeal, is no longer res integra. Even if the question of limitation has been raised, the Court has to go into the merits of the matter after a decision on the question of limitation is made. The maintainability of the appeal would have to be examined on the said benchmark.
9. In the present case, a perusal of the Order-in-Original dated 30th December, 2016 would reveal that the question is whether the Respondent, which is an Internet Service Provider and is providing Lease Internet Broadband services on its optical fibre network and Wireless Radio to various STPIs, Embassies, etc. who are exempted organizations, is entitled to the exemption under the Notification No. 4/2004-ST dated 31st March 2004 or not. The Order-in-Original has directed the recovery of service tax to the tune of Rs.3,13,01,189/- along with inter
