2011 (11) TMI 523 - AT - Service Tax

Waiver of pre-deposit of amount of Rs.7,52,965/- along with interest and penalties - Learned counsel would submit that as regards Health and Fitness Services and Club and Association Services, both the lower authorities have erred in taking wrong amounts for the calculations - Held that the issue involved in this case is regards service tax liability on the amounts received from caterers or decorators and Business Auxiliary Services, is arguable. We find that service tax liability under the Health and Fitness Centre and Club Association services have been confirmed by taking wrong figures - Decided in favor of the assessee by way of direction to deposit an amount of Rs.1,50,000

Summary

Issues:
1. Stay petition for waiver of pre-deposit of service tax liability under Finance Act, 1994.
2. Service tax liability under Business Auxiliary Services, Health Club and Fitness Services, and Club or Association Services.
3. Calculation errors in service tax liability determination.
4. Applicability of service tax on amounts received from caterers or decorators.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad, involved a stay petition seeking waiver of pre-deposit of a service tax liability amounting to Rs.7,52,965 along with interest and penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The service tax liability was related to Business Auxiliary Services, Health Club and Fitness Services, and Club or Association Services. The appellant contested the liability, arguing that errors were made in the calculations by the lower authorities. The counsel highlighted discrepancies in the calculations and disputed the categorization of the liability under Business Auxiliary Services, particularly concerning amounts received from decorators or caterers during the relevant period.

The departmental representative supported the findings of the first appellate authority, emphasizing that the appellant had indeed received amounts from caterers and decorators that should be taxed. After considering the submissions from both parties, the Tribunal acknowledged that the issue of service tax liability on amounts received from caterers or decorators and Business Auxiliary Services was debatable. It was noted that the service tax liability under Health and Fitness Services and Club Association Services was confirmed based on incorrect figures. Consequently, the Tribunal directed the appellant to deposit Rs.1,50,000 within four weeks and report compliance, allowing the waiver of pre-deposit for the balance amount subject to compliance and staying the recovery until the appeal's disposal.

In conclusion, the judgment addressed the complex issues surrounding the service tax liability under different categories and the necessity for detailed examination of the calculations and legal interpretations. The Tribunal's decision to partially allow the waiver of pre-deposit while requiring a partial deposit reflects a balanced approach to ensure fair consideration of the appeal.