And this is exactly what I have a problem with.
Come on, we're all sensible adults here: why have an added charge for service? It's a restaurant, of course I expect to be served - it's all part of the same dining experience and should be all inclusive, so why not incorporate this supposed charge (and VAT) into the price of the food on the menu?
I also don't appreciate the arrogance of being told I've received a certain level of service. Surely I'll be the judge of that, and if I feel the service has been good then I'll tip accordingly, and if I don't then I won't, and perhaps then the standards of service might improve.
Regarding not paying the service charge, I believe that in the UK you can dispute it and aren't legally obliged to pay, although I imagine this doesn't go down too well, unless of course there was a very obvious problem.