2017 (5) TMI 763 - AT - Service Tax

Franchise arrangement - The appellant is submitting that they are representing and acting as a state agency and this is to be considered at the time of deciding the merits of the case - Held that - the agreement between the appellant and the Operators of Airport does not constitute a franchise arrangement for service tax purpose in terms of Section 65 (47) of FA, 1994 - the Misc. Application for taking additional grounds and for early hearing can be allowed. - Stay granted.

Summary

Issues:
1. Misc. Application for taking on record additional grounds in the appeal.
2. Misc. Application for recalling Interim Order granting liberty to Revenue.
3. Request for early hearing of pending appeals.
4. Settlement of central legal issues by the Hon'ble Delhi High Court.
5. Tagging of appeals and decision on recovery of dues.

Analysis:
1. The first issue in this judgment pertains to a Misc. Application seeking to introduce additional grounds in an appeal. The appellant argued that the added ground relates to their legal status as a state agency, which is crucial for deciding the case's merits. The Tribunal allowed this application considering the significance of the new ground.

2. The second issue involves a Misc. Application for recalling an Interim Order that granted the Revenue the liberty to recover dues. The appellant cited a decision by the Hon'ble Delhi High Court, indicating a favorable outcome for them, leading to the Tribunal ruling against any recovery by the Revenue until a final decision is made.

3. The third issue revolves around a request for early hearing of pending appeals. The appellant highlighted that the central legal questions had been resolved by the Hon'ble Delhi High Court in a specific judgment, prompting the Tribunal to agree to an early disposal of the appeals and linking them for a consolidated hearing.

4. The fourth issue addresses the settlement of central legal issues by the Hon'ble Delhi High Court. The High Court's judgment clarified that the agreement between the appellant and the Airport Operators did not constitute a franchise arrangement for service tax purposes under the Finance Act, 1994. This decision played a crucial role in the Tribunal's subsequent rulings.

5. The final issue concerns the tagging of appeals and the decision on the recovery of dues. The Tribunal decided to allow the tagging of related appeals for a joint hearing and set a specific date for the same. Moreover, in light of the legal position established by the Hon'ble Delhi High Court, the Tribunal directed that no recovery be pursued by the Revenue until a final decision is reached, thereby safeguarding the appellant from immediate financial implications.

In conclusion, the judgment addressed various procedural and substantive matters, including the acceptance of additional grounds, the impact of a High Court decision on recovery proceedings, the scheduling of early hearings for pending appeals, the resolution of central legal issues, and the consequential decisions on tagging appeals and recovery of dues.