Delhi High Court
Commissioner Of Service Tax Delhi Ii vs Shyam Spectra Private Limited on 2 July, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 02nd July, 2025
+ SERTA 5/2025
COMMISSIONER OF SERVICE TAX DELHI II .....Appellant
Through: Mr. Atul Tripathi, SSC with Mr.
Gaurav Mani Tripathi & Mr. Shubham
Mishra, Advocates.
versus
SHYAM SPECTRA PRIVATE LIMITED .....Respondent
Through: Mr. J. K. Mittal with Ms. Vandana
Mittal & Mr. Mukesh Choudhary,
Advocates.
CORAM:
JUSTICE PRATHIBA M. SINGH
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
24th 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
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Office of the Commissioner of Service Tax, Delhi-II (hereinafter, ‘Order-in-
Original’).
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
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(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 interest.
10. The said Order-in-Original was challenged by the Respondent, which
was before CESTAT. The CESTAT has allowed the appeal on the ground that
under Section 73(1) of the Finance Act, 1994, the extended period of
limitation of five years could not have been invoked as there was no
suppression of material facts. Thus, the SCN itself has been set aside on the
ground that the same is barred by limitation. Moreover, the CESTAT has not
gone into the aspect of the delay in adjudication, but has only examined the
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delay in issuing the SCN.
11. The obvious conclusion would be that if this Court holds that the SCN
was within the limitation, the issue of taxability would have to be gone into.
In a similar matter i.e. SERTA 2/2024 titled ‘Commissioner of CGST and
Central Excise Delhi South v. M/s Spicejet Ltd.’ , this Court considered all
the judgments cited by Mr. Mittal and has recently taken a view that even if
the impugned order has dealt only with the issue of limitation, the appeal
would lie under Section 35L of the Central Excise Act, 1944 to the Supreme
Court. The relevant portion of the said order is extracted as under:
“10. However, during the course of hearing, it is
clear to this Court that upon the issue of limitation being
decided, the question of taxability would have to be
adjudicated. It is clear from a reading of Section 35G
and 35L of the Central Excise Act, 1944 that whenever
issues of taxability arise, the appeal would lie to the
Supreme Court. The said provisions are extracted
below:
” 35G. Appeal to High Court. –
(1) An appeal shall lie to the High Court from every
order passed in appeal by the Appellate Tribunal on or
after the 1st day of July, 2003 (not being an order
relating, among other things, to the determination of
any question having a relation to the rate of duty of
excise or to the value of goods for purposes of
assessment), if the High Court is satisfied that the case
involves a substantial question of law.
(2) The 2 [Principal Commissioner of Central Excise or
Commissioner of Central Excise] or the other party
aggrieved by any order passed by the Appellate
Tribunal may file an appeal to the High Court and such
appeal under this sub-section shall be –
(a) filed within one hundred and eighty days from the
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date on which the order appealed against is received
by the 3 [Principal Commissioner of Central Excise or
Commissioner of Central Excise] or the other party;
(b) accompanied by a fee of two hundred rupees where
such appeal is filed by the other party;
(c) in the form of a memorandum of appeal precisely
stating therein the substantial question of law involved.
4
[(2A) The High Court may admit an appeal after the
expiry of the period of one hundred and eighty days
referred to in clause (a) of sub-section (2), if it is
satisfied that there was sufficient cause for not filing
the same within that period.]
(3) Where the High Court is satisfied that a substantial
question of law is involved in any case, it shall
formulate that question.
(4) The appeal shall be heard only on the question so
formulated, and the respondents shall, at the hearing
of the appeal, be allowed to argue that the case does
not involve such question :
Provided that nothing in this sub-section shall be
deemed to take away or a bridge the power of the Court
to hear, for reasons to be recorded, the appeal on any
other substantial question of law not formulated by it,
if it is satisfied that the case involves such question.
(5) The High Court shall decide the question of law so
formulated and deliver such judgment thereon
containing the grounds on which such decision is
founded and may award such cost as it deems fit.
(6) The High Court may determine any issue which –
(a) has not been determined by the Appellate Tribunal;
or
(b) has been wrongly determined by the Appellate
Tribunal, by reason of a decision on such question ofSERTA 5/2025 Page 5 of 15
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law as is referred to in sub-section (1).
(7) When an appeal has been filed before the High
Court, it shall be heard by a bench of not less than two
Judges of the High Court, and shall be decided in
accordance with the opinion of such Judges or of the
majority, if any, of such Judges.
(8) Where there is no such majority, the Judges shall
state the point of law upon which they differ and the
case shall, then, be heard upon that point only by one
or more of the other Judges of the High Court and such
point shall be decided according to the opinion of the
majority of the Judges who have heard the case
including those who first heard it.
(9) Save as otherwise provided in this Act, the
provisions of the Code of Civil Procedure, 1908 (5 of
1908), relating to appeals to the High Court shall, as
far as may be, apply in the case of appeals under this
section.
xxx xxx xxx
35L. Appeal to the Supreme Court –
(1)An appeal shall lie to the Supreme Court from –
(a) any judgment of the High Court delivered –
( i ) in an appeal made under section 35G; or
(ii) on a reference made under section 35G by the
Appellate Tribunal before the 1stday of July, 2003;
(iii) on a reference made under section 35H, in any
case which, on its own motion or on an oral application
made by or on behalf of the party aggrieved,
immediately after passing of the judgment, the High
Court certifies to be a fit one for appeal to the Supreme
Court; or].
(b) any order passed before the establishment of the
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relating, among other things, to the determination of
any question having a relation to the rate of duty of
excise or to the value of goods for purposes of
assessment;.
(2)For the purposes of this Chapter, the
determination of any question having a relation to the
rate of duty shall include the determination of
taxability or excisability of goods for the purpose of
assessment.”
11. In view of Sections 35G and 35L of the Central
Excise Act, 1944 which applies in respect of Service Tax,
whenever issues of determining taxability are involved,
the appeal would lie to the Supreme Court. The same has
been also been settled in a series of decisions. In
Commissioner of Service Tax v. Ernst & Young Pvt.
Ltd. and ors., 2014 (2) TMI 1133-Del, the Coordinate
Bench of this Court had observed and held as under:
“9. Before we examine other judgments, it is important
to examine the language of Section 35G in the
bracketed portion which relates to matters in which
appeal is to be filed before the Supreme Court. Section
35L of the F. Act is specific. The words/expression
used is “determination of any question in relation to
rate of duty or value for the purpose of assessment”.
The word “any” and expression ‘in relation to” gives
appropriately wide and broad expanse to the appellate
jurisdiction of the Supreme Court in respect of
question relating to rate of tax or value for the
purpose of assessment. Further, if the order relates to
several issues or questions but when one of the
questions raised relates to “rate of tax” or valuation
in the order in the original, the appeal is maintainable
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before the Supreme Court and no appeal lies before
the High Court under Section 35G of the CE Act.
Referring to the expression “other things” in Section
35G of the CE Act in the case of Bharti Airtel Limited
2013 (30) STR 451 (Del), a Division Bench of this
Court has stated:
“3. On a plain reading of Section 35G of the
Central Excise Act, 1944 it is clear that no
appeal would lie to the High Court from an
order passed by CESTAT if such an order relates
to, among other things, the determination of any
question having a relation to the rate of duty or
to the valuation of the taxable service. It has
nothing to do with the issues sought to be raised
in the appeal but it has everything to do with the
nature of the order passed by the CESTAT. It
may be very well for the appellant to say that it
is only raising an issue pertaining to limitation
but the provision does not speak about the issues
raised in the appeal, on the other hand, it speaks
about the nature of the order passed by the
Tribunal. If the order passed by the Tribunal
which is impugned before the High Court relates
to the determination of value of the taxable
service, then an appeal from such an order
would not lie to the High Court.
4. However, we feel that although those
decisions do support the contention of the
learned counsel for the respondent, the
approach that we have taken is a more direct.
We reiterate, it is not the content of the appeal
that is determinative of whether the appealSERTA 5/2025 Page 8 of 15
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would be maintainable before the High Court or
not but rather the nature of the order which is
impugned in the appeal which determines the
issue.”
12. Further, a Division Bench of this Court in the
judgement of Commissioner of Service Tax v. Delhi
Gymkhana Club Ltd. [2009 (16) STR 129 (Del)],
clarified that any issue with regard to the determination
of any question in relation to valuation for purpose of
assessment, when decided by CESTAT shall be appealed
to the Supreme Court. Relevant paragraphs of the said
judgement are extracted hereinbelow:
“9. It is clear from the above that against certain
orders appeal is provided to the High Court, whereas
in respect of the certain other orders passed by the
appellate tribunal, direct appeal to the Supreme Court
is provided. Section 35L(a) deals with the appeals
which are carried from the orders of the High Court.
However, clause (b) stipulates the nature of orders
passed by the appellate tribunal against which appeal
is to be preferred to the Supreme Court. Where order
passed by the appellate tribunal relates to the
determination of any question having a relation to the
rate of duty of excise or to the value of goods for the
purpose of assessment, the aggrieved party is to
approach the Supreme Court directly by filing appeal
under Section 35L(b). This is made clear even by the
provisions of Section 35G which provides for appeal to
the High Court, as it specifically excludes the orders
relating, among other things, determination of any
question having relation to the rate of duty of excise or
to the value of goods for the purpose of assessment.
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10. The Supreme Court in the case of Navin Chemicals
Mfg. & Trading Co. Ltd. v. Collector of Customs, 1993
(68) E. L.T. 3 (S.C.) had an occasion to deal with the
expression determination of any question having a
relation to the rate of duty of customs or to the value of
goods for the purposes of assessment”. Though that
was a case under the Customs Act, the provisions of the
Central Excise Act were also taken note of, which are
in pari materia with that of the Customs Act. The Apex
Court specifically took note of sub-section (5) to
Section 129D of the Customs Act and noted that this
provision was simultaneously introduced in the
Customs Act as well as the Central Excise Act by
Custom and Central Excise Laws (Amendment) Act,
1988. Thus, Section 129D(5) is identical to Section
35E(5) of the present Act. This provision was
interpreted by the Court in the following manner :-
“11. It will be seen that sub-section (5) uses the said
expression ‘determination of any question having a
relation to the rate of duty or to the value of goods for
the purposes of assessment and the Explanation
thereto provides a definition of it ‘for the purposes of
this sub-section’. The Explanation says that the
expression includes the determination of a question
relating to the rate of duty; to the valuation of goods
for purposes of assessment; to the classification of
goods under the Tariff and whether or not they are
covered by an exemption notification; and whether the
value of goods for purposes of assessment should be
enhanced or reduced having regard to certain matters
that the said Act provides for. Although this
Explanation expressly confines the definition of the
said expression to sub-section 5 of Section 129D, it isSERTA 5/2025 Page 10 of 15
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proper that the said expression used in the other parts
of the said Act should be interpreted similarly. The
statutory definition accords with the meaning we have,
given to the said expression above. Questions relating
to the rate of duty and to the value of goods for
purposes of assessment are questions that squarely fall
within the meaning of the said expression. A dispute as
to the classification of goods and as to whether or not
they are covered by an exemption notification relates
directly and proximately to the rate of duty applicable
thereto for purposes of assessment. Whether the value
of goods for purposes of assessment is required to be
increased or decreased is a question that relates
directly and proximately to the value of goods for
purposes of assessment. The statutory definition of the
said expression indicates that it has to be read to limit
its application to cases where, for the purposes of
assessment, questions arise directly and proximately
as to the rate of duty or the value of the goods.”
11. In view thereof, it is clear that determination of any
question in relation to rate of duty or to the value of
goods for the purpose of assessment and when it is
decided by the CESTAT, appeal thereagainst is
provided to the Supreme Court under Section 35L(b)
and no such appeal is permissible to the High Court.”
13. Further, in the judgement of Commissioner of
Service Tax, Delhi v. Bharti Airtel Ltd. [2013(30) S.T.R.
451 (Del.)], Division Bench of this Court considered the
issues on maintainability of appeal while considering the
decision of CESTAT on limitation issue and held as
under:
“3. On a plain reading of Section 35G of the Central
Excise Act, 1944 it is clear that no appeal would lie toSERTA 5/2025 Page 11 of 15
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the High Court from an order passed by CESTAT if
such an order relates to, among other things, the
determination of any question having a relation to the
rate of duty or to the valuation of the taxable service.
It has nothing to do with the issues sought to be raised
in the appeal but it has everything to do with the nature
of the order passed by the CESTAT. It may be very well
for the appellant to say that it is only raising an issue
pertaining to limitation but the provision does not
speak about the issues raised in the appeal, on the
other hand, it speaks about the nature of the order
passed by the Tribunal. If the order passed by the
Tribunal which is impugned before the High Court
relates to the determination of value of the taxable
service, then an appeal from such an order would not
lie to the High Court. The learned counsel for the
respondent had referred to the following decisions :-
(1) Commissioner of C. Excise, Chandigarh.
Punjab Recorders Ltd. – 2004 (165) E.L.T. 34 (P & H);
(2) Sterlite Optical Technologies Ltd.v.
Commissioner of C. Ex., Aurangabad – 2007 (213)
E.L.T. 658(Bom.);
(3) Commissioner of Customs, Chennai v. Ashu
Exports – 2009 (240) E.L.T. 333(Mad.).
4. However, we feel that although those decisions do
support the contention of the learned counsel for the
respondent, the approach that we have taken is a more
direct. We reiterate, it is not the content of the appeal
that is determinative of whether the appeal would be
maintainable before the High Court or not but rather
the nature of the order
5. In the present case, we find that the impugned order
deals not only with the question of limitation but also
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with the question of valuation. It so happens that in the
present case, the issue with regard to the valuation of
the taxable services was decided in favour of the
revenue but, because the extended period of limitation
was not invokable, as per the Tribunal, the respondent-
assessee did not prefer any appeal against the said
order. But, the order which is impugned before us deals
with both the issues, that is, the issue of valuation of
taxable services as also the issue of limitation. The
mere fact that the appellant is only aggrieved by the
decision on the point of limitation would not make an
appeal from the impugned order maintainable before
this Court because it is not the issues raised in the
appeal which are material but the nature of the order
which is appealed against is relevant for the purpose
of determining whether an appeal would lie in this
Court or not.
6. In view of the fact that the impugned order deals
with the question of valuation apart from the question
of limitation, this appeal would not be maintainable
under Section 35G of the Central Excise Act read
with Section 83 of the Finance Act, 1994. The
objection taken by the learned counsel for the
respondent is well founded. It is for this reason that we
dismiss this appeal as being not maintainable.”
14. Recently, a Co-ordinate Bench of this Court in
ST Appl. No. 73/2012 titled as ‘Commissioner of
Service Tax v. Intertoll ICS CE Cons O & M Pvt.
Ltd.‘, decided vide order dated 16th December, 2022,
the Court has observed as under: –
“4. The learned counsel appearing for the appellant
also fairly states that it is now well settled that when
the question of chargeability of an activity isSERTA 5/2025 Page 13 of 15
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concerned – such as in this case – appeal would lie to
the Supreme Court and would not be maintainable
before this court. She however expresses an
apprehension that the appellant may be disabled from
filing an appeal before the Supreme Court in view of
the internal instructions regarding the pecuniary limit
for filing such appeals.”
15. 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. The original order passed by the
Commissioner considered the question as to whether
CENVAT credit was allowable or not, and whether
penalty was imposable or not in terms of the applicable
law. It also considered the leviability of service tax on
excess baggage charges. Merely because CESTAT has
only considered the issue of limitation, the present appeal
cannot be filed in the High Court.
16. 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.
17. Therefore, the present appeal is dismissed as not
maintainable.
18. 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
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Act, 1963, for the period during which the present appeal
was pending before this Court.
19. The present appeal is disposed of in the
aforesaid terms.”
12. The above decision applies squarely to the present case. Accordingly,
the present application deserves to be allowed and the present appeal is
rejected as being not maintainable.
13. However, the Appellant is free to avail of its remedy in accordance with
law under Section 35L of the Central Excise Act, 1944.
14. 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.
15. The present appeal is dismissed as being not maintainable. The pending
application also stands disposed of.
16. The next date of hearing stands cancelled.
PRATHIBA M. SINGH
JUDGE
RAJNEESH KUMAR GUPTA
JUDGE
JULY 2, 2025/dk/sk/ck
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