2017 (5) TMI 402 - HC - Service Tax

Club or association service - the assessee collected charges from members of clubs for various services but had not paid service tax in respect thereof - The department was of the view that these amounts would fall within the ambit of the words any other amount as defined in Section 65 (105) (zzze) read with Section 65 (25a) of the Finance Act, 1994 - principles of mutuality - Held that - The controversy as to whether the issues such as the one raised in the present appeal relates to taxability or not, is now set at rest including by the department. We are informed that similar questions are, in fact, pending before the Supreme Court - appeal dismissed only on the ground that it is not maintainable under Section 35G.

Summary

Issues:
1. Appeal against Customs, Central Excise & Services Tax Appellate Tribunal's order.
2. Liability to pay service tax on club services.
3. Preliminary objection on the maintainability of the appeal under Section 35G.
4. Interpretation of Section 35L and applicability to the present case.

Analysis:

1. The appeal was filed against the Customs, Central Excise & Services Tax Appellate Tribunal's decision, which favored the respondent/assessee regarding service tax demands. The respondent, a service provider, was alleged to have collected charges without paying service tax. The key contention was whether these charges were liable for service tax under specific provisions of the Finance Act, 1994.

2. The appellant raised substantial questions of law regarding the legality of the Tribunal's order, citing judgments from other High Courts. The core issue was whether the services provided by the respondent, including various club activities, were subject to service tax as per the relevant sections of the Finance Act, 1994. The appellant disputed the Tribunal's decision based on pending appeals in the Supreme Court and the applicability of certain legal doctrines.

3. The respondent objected to the appeal's maintainability under Section 35G of the Central Excise Act, 1944, combined with Section 83 of the Finance Act, 1994. Citing precedents from the Delhi High Court, the respondent argued that such issues should be decided by the Supreme Court, not the High Court. The respondent's objection was supported by legal provisions and judicial interpretations.

4. The interpretation of Section 35L was crucial in determining the appeal's fate. The High Court referred to amendments clarifying that appeals related to taxability or excisability of goods should go directly to the Supreme Court from the Tribunal. The Court relied on previous judgments and circulars to establish the retrospective and clarificatory nature of the amendment. Considering the legislative intent and precedents, the Court concluded that the appeal was not maintainable under Section 35G and dismissed it accordingly.