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TMI Blog2019 (12) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... oung Pvt. Ltd. [ 2014 (2) TMI 1133 - DELHI HIGH COURT ] goes to show that a contention was advanced by the Revenue that the expression rate of duty or value of service should be construed in a narrow manner limiting it to the rate of duty payable on the service chargeable to tax or the valuation of the service which is chargeable to tax and that the same will not encompass the question as to whether the activity is a taxable service under the charging section - The High Court of Delhi held that determination of any question relating to rate of tax would necessarily directly and proximately involve the question, which is, whether the activity falls within the charging section and service tax is leviable on the said activity. It was further held that the said determination is integral and an important injunct to the question of rate of tax. In case service tax is not to be levied or imposed and cannot be imposed under the charging section, no tax would be payable - the words rate of tax in relation to rate of tax would include the question whether or not the activity is excisable to tax under a particular or specific provision. While respectfully following the decision of High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of proper appreciation we will take note of the basic facts that gave rise to both the appeals as hereunder: Tax Appeal No. 01 of 2017 7.A show cause-cum-demand notice dated 07.03.2012 was issued to Sikkim Manipal University, for short, 'SMU', by the Commissioner, on the allegation that SMU was found engaged in providing "franchise service" as defined in sub-clause (zze) of clause (105) of Section 65 of the Finance Act, 1994 (for short, "the Act of 1994") to different Learning Centres in contravention of the provisions of Sections 66, 67, 68, 69 and 70 of the Act of 1994 read with Rules 4, 6 and 7 of Service Tax Rules, 1994, as amended, (for short, "the Rules of 1994") inasmuch as it failed to obtain service tax registration for providing franchise service, which is a taxable service, and it failed to discharge its due service tax liability inclusive of Education Cess and Secondary & Higher Education Cess amounting to ₹ 1,13,06,993/- only for the period from April 2007 to February 2011. 8.Though no reply was submitted by the respondent, the representative of the respondent had availed the opportunity of personal hearing and had also submitted written submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act of 1994 read with Rules 4, 6 and 7 of the Rules of 1994 inasmuch as SMU failed to obtain service tax registration and it failed to pay service tax amounting to ₹ 2,25,64,753/- for the period from 2011-12 to 2015-16 (up to September 2015) in respect of alumni fee so collected by them which was taxable to service tax under the category of 'Business Auxiliary Services' for the period up to 30.06.2012 and thereafter under 'Other than Negative Services' for the period from 01.07.2012 under Section 66B of the Act of 1994. 12.The respondent submitted reply and the representative of the respondent had availed the opportunity of personal hearing and had also submitted written submissions. 13.The Commissioner recorded a finding in the Order-in-Original dated 08.09.2016 that activity of the alumni services provided by SMU is not in relation to furtherance of education and the same is for the benefit of the former students and not for the existing students and accordingly, held that taxability of alumni fees prior to 01.07.2012 will fall under sub-clause (6) of the definition of 'Business Auxiliary Services' and post 01.07.2012 under 'Other than Negative Service'. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its that taxability of accreditation fee is not an issue in Tax Appeal No. 01 of 2017. It is further submitted that CESTAT was wholly wrong in holding that the decision rendered by CESTAT, New Delhi in the case of Punjab Technical University vs. Commissioner of Central Excise and Service Tax, reported in MANU/CE/ 0655/2015, is not applicable to the facts of Tax Appeal No. 01 of 2017 though the ratio of the above case applies in all fours to the facts of the case. CESTAT did not pass any order regarding the rate or value of the service, or its classification regarding its taxability, he contends. Since orders of the CESTAT in both the appeals is not in relation to the determination of any question having a relation to the rate of duty for service tax for the purpose of assessment, the appeals are maintainable before this Court. He has placed reliance on the judgment dated 05.09.2019 of the Hon'ble Supreme Court in the case of Commissioner of Customs, Bangalore-1 vs. M/s Motorola India Ltd., passed in Civil Appeal No.10083 of 2011. 16.Mr. Sameer Rohtagi, learned counsel for the respondent submits that having regard to the Orders-in-Original and the Orders passed by the CESTAT, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as may be, in relation to service tax as they apply in relation to a duty of excise and therefore, Section 35G as well as 35L are applicable for the purpose of preferring an appeal in relation to service tax. 20.The key to the question posed with regard to maintainability of the appeals lies on the meaning to be ascribed to the expression 'determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment', which expression finds place in Section 35G as well as in Section 35L of the Act of 1944. 21.Section 35G (1) of the Act of 1944, which is relevant for our purpose, is reproduced herein below: "35G. Appeal to High Court. - (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, 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), if the High Court is satisfied that the case involves a substantial question of law." (emphasis supplied by us) 22.Section 35G provides that an appeal shall lie to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court observed that the phrase "relation to" is, ordinarily of wide import but in the context of its use in the expression in Section 129-C of the Customs Act, 1962, it must be read as meaning a direct and proximate relationship to the rate of duty and to the value of goods for the purpose of assessment. The Hon'ble Supreme Court, while considering Section 129-D of the Customs Act, 1962, at paragraph 11, had observed as follows: "11. It will be seen that Sub-section 5 uses the said expression 'determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment' and the Explanation thereto provides a definition of it 'for the purposes of this sub-section'. The Explanation says that the expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an exemption notification; and whether the value of goods for purposes of assessment should be enhanced or reduced having regard to certain matters that the said Act provides for. Although this Explanation e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the activity is excisable to tax under a particular or specific provision. 27.In the Memo of Appeal of Tax Appeal No. 01 of 2017, the appellant has, amongst others, framed the following substantial questions of law: "A. xxxxxxxxxxxxx B.Whether the respondent is liable to pay service tax or not? C.xxxxxxxxxxxxx" By filing an affidavit dated 12.03.2018, the appellant has framed the following substantial questions of law, which are as follows: "I. Whether the respondent University is liable to pay service tax on "Accreditation Fees" received by it from its Learning Centres under Sections 65(47) & (48) of Finance Act, 1994. II. xxxxxxxxxxxxxxx." Subsequently, another affidavit dated 26.08.2019 was filed framing the following substantial questions of law: "(I) xxxxxxxxxxxxxxx (II)xxxxxxxxxxxxxxx (III)xxxxxxxxxxxxxxx (IV)Whether the Hon'ble Tribunal is justified in setting aside the Order-in-Original without appreciating the fact that service rendered by the party falls under the purview of Sub Section (47) and (48) of Section 65 of the Finance Act 1994 as per which they were liable to pay service tax and were also required to get registered for paying tax and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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