Pr. Commissioner, Central Tax, GST Delhi North vs. Piyush Chawla

Facts

The Revenue filed an appeal against an order dated 16.07.2018 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), which had rejected the Revenue's appeal against an order-in-original dated 24.07.2015. The original order had been passed by the Principal Commissioner, Service Tax Commissionerate, Delhi-III. A Show Cause Notice dated 23.10.2013 had been issued to the respondent, Piyush Chawla, a sportsperson, alleging that services provided to M/s. KPH Dream Cricket Private Limited should be classified as ‘Business Support Services’ and were taxable under Section 65(105)(zzb) of the Finance Act, 1994. The respondent's role involved commitments for being photographed and wearing advertisements. The Adjudicating Authority and CESTAT had found in favour of the respondent, holding that the promotional activities were performed by the franchisee and the respondent's role was akin to an employee.

Held

The Court held that it did not have the jurisdiction to entertain the present appeal. The respondent's preliminary objection regarding maintainability was upheld. The Court reasoned that the question of whether an activity is exigible to service tax falls within the scope of 'determination of any question having a relation to rate of duty' as contemplated under Section 35(l) of the Central Excise Act, 1944, which mandates appeals to the Supreme Court. Consequently, the appeal filed before the High Court under Section 35G was not maintainable. The Court acknowledged the Revenue's request for remand but stated that once it is accepted that the Court lacks jurisdiction, no further orders can be passed. The appeal was dismissed on the grounds of lack of jurisdiction. The appellant was, however, not precluded from availing other remedies available in law.

Key Issues

1. Whether the High Court has the jurisdiction to entertain an appeal against an order passed by CESTAT concerning the determination of whether an activity is exigible to service tax, under Section 35G of the Central Excise Act, 1944. Petitioner's Argument (Revenue): The Revenue argued that the impugned order should be set aside and the matter remanded to CESTAT because the order relied upon by CESTAT, in Sourav Ganguly & Ors. v. Union of India & Ors., had been set aside by the Calcutta High Court. Respondent's Argument: The respondent raised a preliminary objection regarding the maintainability of the appeal. They contended that under Section 35G of the Central Excise Act, an appeal to the High Court lies only for substantial questions of law other than those relating to the rate of duty or value of goods for assessment. Appeals concerning the determination of questions relating to the rate of duty or value of goods for assessment lie before the Supreme Court under Section 35(l) of the Central Excise Act. The respondent argued that the question of whether an activity is exigible to service tax falls under the purview of Section 35(l), citing Commissioner of Services Tax v. Ernst & Young Pvt. Ltd.