Commissioner Of Central Tax vs. M/S. Syndicate Bank

Held

The High Court held that the appeal was not maintainable under Section 35G of the Central Excise Act, 1944. The Court relied on a coordinate bench's ruling in Commissioner of Service Tax, Bengaluru Vs. Scott Wilson Kirkpatrick (I) Pvt., Ltd., which stated that disputes relating to service tax payable on any service, the value of taxable service for assessment, classification of services, exemption notifications, increase or decrease in the value of services for assessment, whether services are taxable, whether an activity is a service rendering activity, and the classification of services under Section 65(105) of the Service Tax Act, 1994, do not fall within the High Court's jurisdiction under Section 35G. The Court found that the primary dispute in this case rested on the taxability of services, which, as per Section 35L(2) of the Act, is to be adjudicated before the Hon'ble Apex Court. Therefore, the appeal was dismissed without answering the substantial questions of law, with liberty to the revenue to agitate them before the Supreme Court.

Facts

The Commissioner of Central Tax, GST, Mangalore, filed an appeal against an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The respondent, Syndicate Bank, was registered for service tax under various categories. The revenue alleged that for the period 2007-2008, the bank wrongfully availed CENVAT credit without proper documentation and failed to pay service tax on various services, including commission received in advance, debit card income, renting of immovable property, services rendered by the Jammu and Kashmir Branch, and business auxiliary services. CESTAT had held that these services had a nexus with the output services provided by the bank, and therefore, service tax was not leviable on debit card income, commission received in advance, and services rendered by the Jammu and Kashmir branches. The revenue was aggrieved by this decision.

Key Issues

1. Whether the impugned order passed by the CESTAT is non-speaking and liable to be set aside for non-application of mind and non-consideration of issues raised by the Revenue, as per Section 35G of the Central Excise Act. The Revenue contended that the CESTAT order was non-speaking. The Respondent did not record any argument on this point. 2. Whether the Respondent is liable to pay service tax on commission received in advance, debit card income, renting of immovable property, services rendered by the Jammu and Kashmir Branch, and business auxiliary services, as held by the adjudicating authority. The Revenue argued for the taxability of these services. The Respondent argued that these activities had a nexus with their output services and were not amenable to service tax. 3. Whether the Respondent is liable to pay inadmissible CENVAT Credit with applicable interest and penalty. The Revenue contended for the liability. The Respondent did not record any argument on this point. A preliminary objection was raised by the Respondent regarding the maintainability of the appeal under Section 35G of the Act, arguing that taxability issues fall under Section 35L of the Act, which pertains to appeals to the Supreme Court.