Appeal On Service Classification Under 'Insurance Auxiliary Service' Not Maintainable Before High Court: Calcutta High Court

The Calcutta High Court stated that an appeal on service classification under 'insurance auxiliary service' not maintainable before the High Court. Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) was addressing the appeal filed by the department/appellant under Section 35G of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994 challenging the order passed by the Customs, Central Excise & Service Tax Appellate Tribunal, East Zonal Bench, Kolkata (the Tribunal). The issue before the bench was whether the activities of the assessee/respondent including collecting premium from club members and remitting to insurance company falls under the ambit of 'insurance auxiliary service' under Section 65(55) of Finance Act, 1994 on which they have not discharged service tax liability. The department submitted that the assessee operated through front company, which is not a registered entity with service tax and most of the financial transactions are routed through the said company. The department further alleged that the assessee does not hold any license and further raises the question that whether the non-holding of any license by the assessee exonerates him from the taxable liability. The bench opined that an appeal to the High Court is not maintainable if the matter concerns determination of any question having a relation to the 'rate of duty or the value of the goods for the purpose of assessment. Under normal circumstances while dismissing the appeal as not maintainable, the department could prefer an appeal before the Supreme Court but the department could not do in this case as the amount of service tax demanded is Rs.4,72,32,433/-, which is well below the threshold limit of Rs.5 crore and, therefore, the department cannot maintain an appeal before the Supreme Court. In view of the above, the bench dismissed the appeal. Case Title: Commissioner of Service Tax Kolkata v. M/s Medicare Service (India) Pvt. Ltd. Case Number: CEXA/10/2025 Counsel for Appellant/Department: B. P. Banerjee and Kaustav Kanti Maity Counsel for Respondent/Assessee: J. P. Khaitan, Agnibesh Sengupta, Subhendu Halder and Abhirup Halder Click Here To Read/Download The Order

Appeal On Service Classification Under 'Insurance Auxiliary Service' Not Maintainable Before High Court: Calcutta High Court

Mehak Dhiman

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