- 1 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2026 PRESENT THE HON'BLE MR. JUSTICE R DEVDAS AND THE HON'BLE DR. JUSTICE K.MANMADHA RAO CENTRAL EXCISE APPEAL NO. 23 OF 2026 BETWEEN: COMMISSIONER OF CENTRAL TAXES OFFICE OF THE COMMISSIONER OF CENTRAL TAX, BENGALURU NORTH COMMISSIONERATE, HMT BHAVAN, GROUND FLOOR, BELLARY ROAD, BENGALURU - 560 032 REP. BY KOTRASWAMY M. …APPELLANT (BY SRI.UNNIKRISHNAN.M., CGSPC) AND: M/S INFINEON TECHNOLOGIES (I) PVT LTD PRESTIGE THIRULAKSHMI, NO. 11, GROUND AND TEN UPPER FLOORS, MAHATMA GANDHI ROAD, BANGALORE - 560 001. …RESPONDENT (BY SRI. KUMAR HARSHVARDHAN., SRI. BHARATH JANARTHANAN., MS. RITU SHIVAKUMAR., ADVOCATES) Digitally signed by JUANITA THEJESWINI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 THIS CEA IS FILED UNDER SECTION 35G OF THE CENTRAL EXCISE ACT, 1944, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE HONBLE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, BANGALORE IN FINAL ORDER NO.20910-20922/2025-ST (DB) DATED 09.05.2025 VIDE ANNEXURE-A IN RESPECT OF ST APPEAL NO.21311/2018 AND CONFIRM THE ORDER IN ORIGINAL NO.38 AND 39/2017-18, DATED 27.02.2018 (IN RESPECT OF SERVICE TAX DEMAND OF RS.4,30,98,787/-) ALONG WITH INTEREST AND PENALTIES) PASSED BY THE COMMISSIONER OF CENTRAL TAX, BENGALURU NORTH COMMISSIONERATE, BENGALURU. THIS CENTRAL EXCISE APPEAL HAVING BEEN HEARD AND RESERVED ON 03.09.2026 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, THIS COURT DELIVERED THE FOLLOWING: CORAM: HON'BLE MR. JUSTICE R DEVDAS and HON'BLE DR. JUSTICE K.MANMADHA RAO CAV JUDGMENT (PER: HON'BLE MR. JUSTICE R DEVDAS) Since question of maintainability of this appeal filed under Section 35G of Central Excise Act, 1944, is raised by the learned Counsel for the respondent, the matter is taken up for consideration accordingly. 2. It is the contention of the learned Counsel for the respondent that this appeal filed under Section 35G of - 3 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 Central Excise Act, 1944, (hereinafter referred to as ‘Act, 1944’ for short) is not maintainable and the same is maintainable before the Hon'ble Supreme Court under Section 35L of the Act, 1944. In order to buttress his contention, learned Counsel for the respondent submitted that the Hon'ble Supreme Court has considered and laid at rest the issue in M/S. ALUPRO BUILDING SYSTEMS PVT. LTD. VS. COMMISSIONER OF CENTRAL EXCISE, BANGALORE-II1. He submitted that Clause (ii) of sub- section (1) of Section 35L of the Act, 1944, makes it clear that an appeal shall lie to the Supreme Court from any order passed before the establishment of the National Tax Tribunal by the Appellate Tribunal relating, among other things, to the determination of any question having a relationship to the rate of duty of excise or to the value of goods for purposes of assessment. Further, sub-section (2) therein clarifies that for the purpose Chapter VI-A, the determination of any question having a relation to the rate 1 2026 INSC 582 - 4 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 of duty shall include the determination of taxability or excisability of goods for the purpose of assessment. For that purpose, the Hon'ble Supreme Court has raised the issue: “Whether the High Court had the jurisdiction under Section 35G of the Act to decide the excisability of the Aluminum Composite Panels and whether cutting, grooving and routing of the Aluminum Composite Panels would amount to manufacture under Section 2(f) of the Act, 1944?” 3. It is contended that the Hon'ble Supreme Court, while answering the said issues, has held that an appeal under Section 35G is excluded where the order of the Tribunal concerns a question having a relation to the rate of duty or the value of goods for assessment. The determination whether goods are excisable is a necessary precursor to assessment and is directly and proximately connected with the rate of duty. Section 35L read with its clarificatory sub-section (2), channels such disputes to the Supreme Court and confirms that excisability falls within - 5 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 the excluded class of questions. Therefore, it was held that the High Court lacked jurisdiction to decide the question of excisability and the proper forum was the Supreme Court. 4. Applying the test, learned Counsel for the respondent would contend that the Customs, Excise and Service Tax Appellate Tribunal (for short, ‘CESTAT’) has gone into the question whether the activity of ‘marketing promotional and after-sales services’ provided by the respondent to their Singapore entity qualify as services of an ‘Intermediary’ in terms of Rule 2(f) of the Place of Provision of Services Rules, 2012 for the rejection of the respondent’s refund claim of CENVAT credit. For that purpose, the CESTAT has considered whether the respondent provides ‘marketing promotional and after- sales services’ which amounts to ‘export of services’. It is therefore clear that the issue decided by CESTAT clearly touches upon the determination of a question having a relation to the rate of duty of excise or to the value of - 6 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 goods for purposes of assessment and therefore, the same falls within the ‘exclusion’ provided in Section 35G and clause (ii) of sub-section (1) of Section 35L as clarified in sub-section (2) of Section 35L, within the purview of the Hon'ble Supreme Court. 5. Per contra, Sri N.Unnikrishnan, learned Central Government Senior Panel Counsel for the appellant submitted that there is no issue touching upon anything so as to determine any question having a relation to the rate of duty of excise in the present case. What has been considered by CESTAT is only whether the respondent is an ‘Intermediary’ in terms of Rule 2(f) of the Place of Provision of Services Rules, 2012, and since it is found that the respondent cannot be considered as an intermediary and further since the services provided to the respondent qualify for export since it is providing services to M/s. Infeneon Technologies Asia Pacific Pvt. Ltd., Singapore (herein after referred to as ITAP for short) - 7 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 which is outside India and is receiving convertible foreign exchange for such services, such a decision has been questioned before this Court. The issue therefore clearly falls within the confines of Section 35G of the Act and the appeal is therefore maintainable before this Court. 6. Heard the learned Counsel for the respondent, learned Counsel for the appellant and perused the judgments cited by the learned Counsels, for deciding the issue regarding maintainability of this appeal. 7. In M/S. ALUPRO BUILDING SYSTEMS PVT. LTD.1, the Hon'ble Supreme Court, while analyzing the scope and purport of Sections 35G and 35L of the Act, 1944, has held that a plain reading of sub-section (1) of Section 35G would reveal that an appeal lies to the High Court from an order passed by the Appellate Tribunal where it does not relate to the determination of any question having a relation to the rate of excise duty or to the value of goods. 1 2026 INSC 582 - 8 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 In other words, the provision envisages a clear bar on appeals from an order not being an order relating to the determination of any question having a relation to the rate of excise duty or the value of goods. At the same time, sub-section (1) (b) of Section 35L provides that an appeal from an order passed by the Appellate Tribunal relating to the determination of any question having a relationship to the rate of excise duty or to the value of goods for the purpose of assessment lie to the Supreme Court. Further, sub-section (2) of Section 35L provides that questions having relation to the ‘rate of duty’ includes the questions on determination of taxability or excisability of goods for the purpose of assessment. 8. Further, the Hon'ble Supreme Court has held that the word “any” employed in Section 35G gives the exclusion as regards the jurisdiction a wide sweep, indicating that the question referred to therein is not limited to a specific question of rate of excise duty or value of goods. In other words, even peripheral questions - 9 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 touching a question pertaining to rate or valuation can attract such exclusion. Further, the conscious views of the prefatory phrase “among other things” also serve to communicate that these are not the only exclusions and are merely illustrative of a broader category of rate of duty and valuation. It was further held that the expression “for purposes of assessment” also deserves some attention. It qualifies and governs both the preceding links of the exclusion i.e., the rate of excise duty and the value of goods. In other words, the exclusion is not triggered by every question touching upon the rate of duty or value of goods in the abstract. The question must have a relation to rate or value specifically in the context of assessment. It was also held that another good reason to hold the aforesaid is that decision on such an issue would not only have ramifications in personam but also in rem. 9. It is necessary to notice that the Hon'ble Supreme Court has considered many earlier judgments of the - 10 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 Supreme Court, including NAVIN CHEMICALS MANUFACTURING & TRADING CO. LTD. VS. COLLECTOR OF CUSTOMS2, where it was held that 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. Therefore, it is clear that the Apex court noted that the classification of goods under the tariff for the purpose of determining the rate of duty would be a question having relation to the rate of duty. It has been held that what Section 35G excludes, Section 35L picks up. The exclusion in Section 35G is, therefore, meaningful only when read along with Section 35L. The two provisions are not independent of each other. They are interdependent and together they constitute a complete, exhaustive, and mutually exclusive appellate scheme under the Act, 1944. 2 (1993) 4 SCC 320 - 11 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 10. Looking at the facts therein, the Hon'ble Supreme Court found that the issue before the High Court was whether the activity of cutting and routing or grooving of Aluminum Composite Panels would bring into existence new product subjecting it to payment of excise duty. Accordingly, it was held that the only determination made by the Tribunal is with regard to the excisability of the goods in question. Since what was done by the Tribunal is the determination of the levy of duty under the Act, 1944, it was held that the Revenue ought to have preferred an appeal before the Supreme Court under Section 35L of the Act. 11. This Court is therefore required to consider from the facts of the present case and the lis decided by CESTAT as to whether the impugned order relates to, 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? - 12 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 12. The question formulated by CESTAT, in paragraph 40 of the impugned order is, “whether the appellant is an intermediary in terms of Rule 2(f) of the Place Provision of Service Rules, 2012” and “whether the services supplied by the appellant to its parent entity located outside India qualify as an export of services in terms of Rule 6A of the Service Tax Rules, 1994”. The CESTAT, for the purpose has considered the show-cause notice issued by the competent authority where it is alleged that the services rendered by the respondent to their overseas entity is in the nature of an ‘Intermediary’ inasmuch as they are engaged in the activity of providing various marketing promotion and after-sale services linking consumers/recipient of such output services in India. The relationship between the respondent and ITAP, Singapore has been analyzed by CESTAT and having regard to the agreements entered into between the parties, it was determined that the respondent does not arrange or facilitate the provision of any main supply - 13 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 between ITAP, Singapore and their customers in India. It was accordingly held that the services provided by the respondent to their overseas entity ITAP, Singapore cannot be considered as “intermediary services” provided in India in terms of Section 65B (44) of Finance Act, 1994 and the said service qualify as ‘export of service’. 13. It is therefore clear that the issue decided by CESTAT and now sought to be questioned in this appeal pertains to determination of a question having a relation to excisability and to the value of the services rendered by the respondent to its overseas entity ITAP, Singapore. The issue is one of classification and excisability. The issue squarely falls within the bracketed portion of sub- section (1) of Section 35G and sub-clause (b) of sub- section (1) of Section 35L and sub-section (2) of Section 35L of the Act, 1944. The appeal is therefore not maintainable before this Court. The appellant will have to - 14 - HC-KAR CNR: KAHC010301182026 NC: 2026:KHC:52801-DB CEA No. 23 of 2026 approach the Hon’ble Supreme Court invoking Section 35L of the Act, 1944. 14. The issue raised is accordingly answered. 15. The Appeal is accordingly dismissed, while reserving liberty to the appellant to approach the Hon’ble Supreme Court, in accordance with law. 16. Pending Interlocutory Application(s), if any, stand disposed of. 17. Registry to return the original documents or certified copies, if any, to the appellant while retaining a copy for the file. Sd/- (R DEVDAS) JUDGE Sd/- (DR.K.MANMADHA RAO) JUDGE DL CT:JL