2009 (9) TMI 731 - AT - Service Tax

Waiver of pre-deposit - Taxability - subscription - Club or Association service - Held that - the appellants have deposited an amount disputed under other services. As regards the service tax liability on the membership deposit we are of considered view that there cannot be any service tax liability. The issue whether the amount which has been paid as deposit is refunded or not can be considered at the time of final disposal of the appeal - the deposit of 12.44 lakh as enough to hear and dispose the appeal. Accordingly application for waiver of pre-deposit of the balance amounts involved is allowed - decided in favor of applicant.

Summary

Issues: Stay petition against waiver of pre-deposit of Service Tax, Interest, Penalties under various sections of the Finance Act, 1994. Dispute over Service Tax liability on Club or Association Membership Services and other services rendered.

Analysis:

1. Stay Petition against Waiver of Pre-deposit:
The stay petition was filed against the waiver of pre-deposit of Service Tax, Interest, and Penalties under different sections of the Finance Act, 1994. The amounts in question included Service Tax of Rs. 62,75,575, Interest under Section 75, Penalties under Sections 76, 77, and 78 of the Finance Act, 1994.

2. Dispute over Service Tax Liability on Club or Association Membership Services:
The Service Tax liability confirmation arose due to services rendered under the category of "Club or Association Membership Services" as per Clause 65(25a) of the Finance Act, 1994. The Chartered Accountant for the Appellant highlighted that the liability was calculated based on various services like annual subscriptions, health club and spa services, guest charges, banquet halls, laundry service, internet service, and travel desk. The Appellant had already discharged the liability for most services except for the membership deposit.

3. Interpretation of Club or Association Membership Services:
The JCDR argued that amounts collected from members, including membership deposits, are part of the gross value subject to taxation under "Club or Association Membership Services." However, upon careful consideration, the Tribunal found that the Appellant had paid the service tax on certain services but disputed the liability on other services falling under the "subscription" category.

4. Decision on Service Tax Liability:
The Tribunal held that the membership deposit did not attract service tax liability. They acknowledged the Appellant's payment of Rs. 12,44,722 towards the disputed services and considered it sufficient for the appeal proceedings. Therefore, the application for waiver of pre-deposit for the remaining amounts was allowed, and the recovery was stayed until the appeal's final disposal.

5. Conclusion:
The Tribunal's decision clarified the scope of service tax liability concerning Club or Association Membership Services and other rendered services. By allowing the waiver of pre-deposit for the disputed amounts and staying the recovery, the Tribunal ensured a fair hearing and disposal of the appeal.

This detailed analysis covers the issues raised in the judgment, including the dispute over Service Tax liability and the Tribunal's decision regarding the waiver of pre-deposit for the Appellant.