TaxTMI 
TaxTMI 
2019 (12) TMI 560
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.... 2.Tax Appeal No. 02 of 2017 is an appeal under Section 35G preferred against the Order No. 75757/2016 dated 14.12.2016 passed by the CESTAT, Eastern Zonal Bench, Kolkata in Appeal No. ST/76840/2016 whereby, while allowing the appeal with consequential reliefs, the Order-in-Original No. 22/COMM/ST/SLG/16-17 dated 08.09.2016 passed by the Commissioner was set aside. 3.In both the appeals parties are same. The respondent in the appeals had raised a preliminary objection to the maintainability of both the appeals under Section 35G of the Act of 1944 by filing separate preliminary objections to that effect on 20.09.2017. 4.We have heard Mr. B.K. Gupta, learned counsel appearing for the appellant in both the appeals and Mr. Sameer Rohtagi, learned counsel, who also appear for the respondent in both the appeals on the maintainability of the appeals under Section 35G of the Act of 1944. 5.The respondent is a University set up under the Sikkim Manipal University of Health, Medical and Technological Science Act, 1995, enacted by the Sikkim State Legislature. 6.For the purpose of proper appreciation we will take note of the basic facts that gave rise to both the appeals as hereu....
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....demand of Service Tax including Education Cess and Secondary & Higher Education Cess, to the tune of Rs. 1,01,51,705/- (Rupees one crore one lakh fifty one thousand seven hundred five) only from the said noticee under Section 73 (1) of the Finance Act, 1994. [B]Applicable interest for the relevant period is to be paid by the said noticee in terms of Section 75 of the Finance Act, 1994. [C]I impose penalty of Rs. 1,01,51,705/- (Rupees one crore one lakh fifty one thousand seven hundred five) only on the said noticee in terms of Section 78 of the Finance Act, 1994." 10.The CESTAT accepted the argument of the respondent that when the fee charged by SMU and shared with Learning Centres is not subject to service tax, amount in respect of accreditation fee cannot be brought under the net of service tax. Tax Appeal No. 02 of 2017 11.A show cause-cum-demand notice dated 08.04.2016 was issued stating that SMU had been collecting alumni fees along with admission fee at the time of registration from their students and it had violated the provisions of Section 68, 69 and 70 of the Act of 1994 read with Rules 4, 6 and 7 of the Rules of 1994 inasmuch as SMU failed to o....
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....on 68 of the said Act. However, the Noticee can avail the option of paying only 25% of such amount i.e. Rs. 56,41,188.00 (Rupees fifty six lakhs forty one thousand one hundred and eighty- eight) only, as 'penalty', subject to fulfillment of the conditions as prescribed under the 2nd and 3rd Proviso of Section 78(1) of the Finance Act, 1994. iv)I impose a penalty of Rs. 10,000.00 (Rupees ten thousand) only under Section 77(1)(a) of the said Act for failure to take registration under the category of Business Auxiliary service as provided under Section 69 of the said Act. v)I impose a penalty of Rs. 10,000.00 (Rupees ten thousand) only under Section 70 of the said Act read with Rule 7C of the Service Tax Rules, 1994; for failure to submit statutory returns in prescribed manner under the category of Business Auxiliary Service." 14.The CESTAT recorded a finding that SMU had collected some money in the name of alumni fee but without providing any service and so, when no service is provided then applicability of service tax is not in question. 15.Mr. B.K. Gupta, learned counsel for the appellant submits that taxability of accreditation fee is not an issue in Tax Ap....
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....ntainable before this Court. He also places reliance in the case of Navin Chemicals Mfg. and Trading Co. Ltd. vs. Collector of Customs, reported in MANU/SC/0571/1993. It is also submitted by Mr. Rohtagi that the Special Leave Petition filed by the Revenue against the decision in Ernst & Young Pvt. Ltd. (supra) was dismissed as withdrawn by the Hon'ble Supreme Court by an order dated 19.01.2015. 17.We have considered the submissions of learned counsel for the parties and have perused the material on record. 18.Whether or not the CESTAT was correct in not following the decision rendered by CESTAT, Principal Bench, New Delhi, in Punjab Technical University (supra) is a question that will take us to examine the issue on merits. When we are considering a preliminary objection regarding maintainability of the appeals before this Court, we deem it appropriate not to examine the correctness or otherwise of the order of the CESTAT dated 16.12.2016 at this stage. 19.Section 83 of the Finance Act, 1994 provides, amongst others, that Section 35G and Section 35L of the Act of 1944, as in force from time to time, shall apply, so far as may be, in relation to service tax as they apply in....
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....sing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court; or (b) 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 relation to the rate of duty of excise or to the value of goods for purposes of assessment. (emphasis supplied by us) (2) For the purpose of this Chapter, the determination of any question having a relation to the rate of duty shall include the determination of taxability or excisability of goods for the purpose of assessment." 24.A perusal of Section 35L (b) goes to show that an appeal against any order passed by the CESTAT 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 shall lie directly to the Hon'ble Supreme Court. Such order, as is noticed earlier, is not made appellable to the High Court, as Section 35G specifically excludes such an order from being a subject matter of an appeal before the High Court. 25.In Navin Chemicals Mfg. and Trading Co. Ltd. (supr....
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....igh Court of Delhi in Ernst & Young Pvt. Ltd. (supra) 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. It was also contended that when the question relates to excisability or levy of tax, the same does not amount to a dispute about the rate of tax. 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. Accordingly, it was held the words 'rate of tax' in relation to rate of tax ....
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....ion 66 D (i) of Finance Act, 1994. II. xxxxxxxxxxxxxxxxx" 29.Having regard to the nature of the Orders-in-Original as well as the orders of CESTAT, it is evident that determination of the question as to whether service tax demand on the accreditation fees received by the respondent as also on alumni fees collected can stand to be levied by the Department or not arise in these appeals. The substantial questions of law framed by the appellant, as noted herein above, also demonstrate that the question as to whether the respondent is liable to pay service tax on accreditation fee and alumni fee as collected by SMU very much arises in the appeals. 30.In M/s Motorola India Ltd. (supra), the question that arose for consideration was as to whether an appeal from CESTAT, involving an issue regarding violation of conditions contained in the customs exemption notification would lie before the High Court under the provisions of Section 130 of the Customs Act, 1962 or to the Hon'ble Supreme Court under the provisions of Section 130E of the Customs Act, 1962. It is noticeable that Section 130E does not have a provision like Section 35L (2) of the Act of 1944. 31.The Hon'ble Sup....