[Cites 6, Cited by 0]
Calcutta High Court
Commissioner Of Service Tax vs M/S. Mstc Limited on 11 February, 2026
Author: Rajarshi Bharadwaj
Bench: Rajarshi Bharadwaj
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 before the Court has determined
whether it has the jurisdiction to entertain the challenge.
8. We must further emphasize that at the stage of Hearing on Admission,
the Court's focus is singular: to ascertain whether the Appellant has
made out a case involving a substantial question of law. The
Respondent, at this pre-admission stage, lacks the locus standi to invite
the Court into the "thicket of merits." To allow such a prayer would be to
put the cart before the horse and subvert the statutory scheme.
9. 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 before the Court has determined
whether it has the jurisdiction to entertain the challenge.
10. Accordingly, as the main appeal has not yet reached the stage of
admission, the Cross-Objection (OCOT 6 of 2025) is hereby dismissed as
premature.
11. The Appellant is directed to be ready with the Proposed Substantial
Questions of Law, specifically addressing the Tribunal's findings on the
invocation of the extended period of limitation under Section 73(1) of the
Finance Act, 1994.
12. Let the appeal be listed for Hearing on Admission on February 26, 2026.
I AGREE
(RAJARSHI BHARADWAJ, J.) (UDAY KUMAR, J.)
